Draft Prospectus April13, 2015 Please read Section 26 of the Companies Act, % Fixed Price Issue

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1 Draft Prospectus April13, 2015 Please read Section 26 of the Companies Act, % Fixed Price Issue ZEAL AQUA LIMITED Our Company was incorporated as Zeal Aqua Private Limited in Surat, Gujarat, a private limited company under the provisions of the Companies Act, 1956 vide certificate of incorporation dated March 6, 2009 bearing registration no issued by the Assistant Registrar of Companies, Gujarat, Dadra and Hagar Nagar Havelli. Subsequently, vide Fresh Certificate of Incorporation dated March 31, 2015, our Company was converted into a public limited company and the name of our Company was changed to Zeal Aqua Limited. Our corporate identification number is U05004GJ2009PLC For further details of incorporation, changes of name and changes in registered office of our Company please refer to the chapters titled General Information and Our History and Certain Corporate Matters beginning on pages 49 and 137 respectively, of this Draft Prospectus. Registered Office: At Olpad, GIDC, Pl. No. 4 and 5, Ta Olpad, Surat , Gujarat Tel. No.: ; Fax No.: Contact Person: Mr. Pratim Ramani, Company Secretary and Compliance Officer ipo@zealaqua.com; Website: PROMOTERS OF OUR COMPANY: MR. SHANTILAL PATEL AND MR. PRADEEP NAVIK THE ISSUE PUBLIC ISSUE OF 11,35,000 EQUITY SHARES OF FACE VALUE OF RS. 10 EACH ( EQUITY SHARES ) OF ZEAL AQUA LIMITED (THE COMPANY OR THE ISSUER ) FOR CASH AT A PRICE OF RS. 122 PER EQUITY SHARE, INCLUDING A SHARE PREMIUM OF RS. 112 PER EQUITY SHARE (THE ISSUE PRICE ), AGGREGATING RS LACS ( THE ISSUE ), OF WHICH 60,000 EQUITY SHARES OF FACE VALUE OF RS. 10 EACH FOR CASH AT A PRICE OF RS. 122 PER EQUITY SHARE, AGGREGATING RS LACS WILL BE RESERVED FOR SUBSCRIPTION BY THE MARKET MAKER TO THE ISSUE (THE MARKET MAKER RESERVATION PORTION ). THE ISSUE LESS MARKET MAKER RESERVATION PORTION I.E. ISSUE OF 10,75,000 EQUITY SHARES OF FACE VALUE OF RS. 10 EACH FOR CASH AT A PRICE OF RS. 122 PER EQUITY SHARE, AGGREGATING RS LACS IS HEREINAFTER REFERED TO AS THE NET ISSUE. THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 27.01% AND 25.58% RESPECTIVELY OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE FACE VALUE OF THE EQUITY SHARES IS RS. 10 EACH AND THE ISSUE PRICE OF RS IS 12.2 TIMES OF THE FACE VALUE OF THE EQUITY SHARES. All potential investors may participate in the Issue through an Application Supported by Blocked Amount ( ASBA ) process providing details about the bank account which will be blocked by the Self Certified Syndicate Banks ( SCSBs ) for the same. For details in this regard, specific attention is invited to the chapter titled Issue Procedure beginning on page 268 of this Draft Prospectus. Qualified Institutional Buyers and Non Institutional Investors shall compulsorily participate in the Issue through ASBA process. In case of delay, if any in refund, our Company shall pay interest on the application money at the rate of 15% per annum for the period of delay. A copy has been delivered for registration to the Registrar as required under section 26 of the Companies Act, THE ISSUE IS BEING MADE IN ACCORDANCE WITH CHAPTER XB OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED FROM TIME TO TIME ( SEBI (ICDR) REGULATIONS ). For further details please refer the section titled Issue Information beginning on page 259 of this Draft Prospectus. RISKS IN RELATION TO FIRST ISSUE This being the first public issue of the Issuer, there has been no formal market for our Equity Shares. The face value of the Equity Shares of our Company is RS. 10 and the Issue price of RS. 122 per Equity Share is 12.2 times of the face value. The Issue Price (as determined by our Company in consultation with the Lead Manager as stated in the chapter titled Basis for the Issue Price beginning on page 82 of this Draft Prospectus) should not be taken to be indicative of the market price of the Equity Shares after such Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this issue. For taking an investment decision, investors must rely on their own examination of the Company and this issue, including the risks involved. The Equity Shares offered in the issue have not been recommended or approved by the Securities and Exchange Board of India ( SEBI ), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Prospectus. Specific attention of the investors is invited to the section titled Risk Factors beginning on page 13 of this Draft Prospectus. ISSUER S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Prospectus contains all information with regard to the Issuer and this Issue, which is material in the context of this Issue, that the information contained in this Draft Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Prospectus as a whole or any of such information or the expression of any such opinions or intentions, misleading, in any material respect. LISTING The Equity Shares of our Company offered through this Draft Prospectus are proposed to be listed on the SME platform of BSE Limited ( BSE ). In terms of the Chapter XB of the SEBI (ICDR) Regulations, 2009, as amended from time to time, we are not required to obtain an in-principal listing approval for the shares being offered in this issue. However, our Company has received an approval letter dated [ ] from BSE for using its name in this offer document for listing of our shares on the SME Platform of BSE. For the purpose of this Issue, SME Platform of the BSE shall be the Designated Stock Exchange. LEAD MANAGER TO THE ISSUE REGISTAR TO THE ISSUE ISSUE OPENS ON [ ] PANTOMATH CAPITAL ADVISORS PRIVATE LIMITED 108, Madhava Premises Co-operative Society Limited Bandra Kurla Complex, Bandra East, Mumbai Tel: Fax: Website: ipo@pantomathgroup.com Investor Grievance Id: ipo@pantomathgroup.com Contact Person: Mr. Mahavir Lunawat SEBI Registration Number: INM ISSUE PROGRAMME ISSUE CLOSES ON [ ] BIGSHARE SERVICES PRIVATE LIMITED E/2, Ansa Industrial Estate Saki Vihar Road Saki Naka Andheri (East), Mumbai Tel: Fax: ipo@bigshareonline.com Website: Investor Grievance Id: ipo@bigshareonline.com Contact Person: Mr. Vipin Gupta SEBI Registration Number: INR

2 Table of Contents SECTION I GENERAL...3 DEFINITION AND ABBREVATION...3 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA FORWARD LOOKING STATEMENT SECTION II - RISK FACTORS SECTION III INTRODUCTION SUMMARY OF OUR INDUSTRY SUMMARY OF OUR BUSINESS SUMMARY OF FINANCIAL STATEMENTS THE ISSUE GENERAL INFORMATION CAPITAL STRUCTURE OBJECTS OF THE ISSUE BASIS FOR ISSUE PRICE STATEMENT OF POSSIBLE TAX BENEFITS SECTION IV ABOUT THE COMPANY OUR INDUSTRY OUR BUSINESS KEY INDUSTRY REGULATIONS AND POLICIES OUR HISTORY AND CERTAIN OTHER CORPORATE MATTERS OUR MANAGEMENT OUR PROMOTER AND PROMOTER GROUP OUR GROUP ENTITIES RELATED PARTY TRANSACTIONS DIVIDEND POLICY SECTION V FINANCIAL STATEMENTS FINANCIAL STATEMENT AS RESTATED MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION FINANCIAL INDEBTNESS SECTION VI LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS GOVERNMENT AND OTHER STATUTORY APPROVALS OTHER REGULATORY AND STATUTORY DISCLOSURES SECTION VII ISSUE INFORMATION TERMS OF THE ISSUE ISSUE STRUCTURE ISSUE PROCEDURE RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES SECTION VIII MAIN PROVISIONS OF ARTICLES OF ASSOCIATION SECTION IX OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION DECLARATION Page 1 of 370

3 The Equity Shares have not been and will not be registered under the U.S Securities Act of 1933, as amended ( U.S. Securities Act ) or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S), except pursuant to exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities laws. Accordingly, the Equity Shares are being offered and sold only outside the United States in offshore transaction in reliance on Regulation S under the U.S Securities Act and the applicable laws of the jurisdiction where those offers and sale occur. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and application may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Page 2 of 370

4 SECTION I GENERAL DEFINITION AND ABBREVATION Zeal Aqua Limited Draft Prospectus In this Draft Prospectus, unless the context otherwise requires, the terms and abbreviations stated hereunder shall have the meanings as assigned therewith. Company Related Terms Term Articles or Articles of Association or AOA Auditor or Statutory Auditor Banker to our Company Board or Board of Directors or our Board Company Secretary and Compliance Officer Corporate Office Director(s) Equity Shares Equity Shareholders Group Companies Memorandum of Association or Memorandum or MOA Peer Reviewed Auditor Promoters or our Promoters Promoter Group Registered Office RoC/ Registrar of Companies, Maharashtra Shareholders Zeal Aqua Limited, or the Company,or our Company or we, us, our, or Zeal Aqua or Issuer or the Issuer Company Description The Articles of Association of our Company, as amended from time to time The auditor of our Company, being M/s. Pary & Co., Chartered Accountants [ ] The Board of Directors of our Company, as duly constituted from time to time, or committee(s) thereof Mr. Pratim Ramani The Corporate Office of our Company, situated at Plot No 4-5, GIDC, Olpad, Dist Surat, Gujarat , India The Director(s) of our Company, unless otherwise specified Equity Shares of our Company of face value of Rs. 10 each fully paid up Persons holding Equity Shares of our Company Such entities as are included in the chapter titled Our Group Entities beginning on page number 161 of this Draft Prospectus The Memorandum of Association of our Company, as amended from time to time The Peer Reviewed Auditor of our Company, being M/s. Pary & Co. Promoters of our company being Mr. Pradeep Navik and Mr. Shantilal Patel Includes such persons and entities constituting our promoter group in terms of Regulation 2(zb) of the SEBI (ICDR) Regulations and a list of which is provided in the chapter titled Our Promoter and Promoter Group beginning on page 155 of this Draft Prospectus The Registered office of our Company situated at Plot No 4-5, GIDC, Olpad, Dist Surat, Gujarat , India The Registrar of Companies, Gujarat, located at ROC Bhavan, Opp Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad Gujarat India. Shareholders of our Company Zeal Aqua Limited, a public limited company incorporated under the provisions of the Companies Act, 2013 and having its registered office at Plot No 4-5, GIDC, Olpad, Dist Surat, Gujarat , India Page 3 of 370

5 Issue Related Terms Zeal Aqua Limited Draft Prospectus Term Description Allocation/ Allocation of Equity Shares The Allocation of Equity Shares of our Company pursuant to Issue of Equity Shares to the successful Applicants Allotment/ Allot/ Allotted Issue and allotment of Equity Shares of our Company pursuant to Issue of the Equity Shares to the successful Applicants Allottee(s) Successful Applicant(s) to whom Equity Shares of our Company have been allotted Applicant Any prospective investor who makes an application for Equity Shares of our Company in terms of this Draft Prospectus Application Amount The amount at which the Applicant makes an application for Equity Shares of our Company in terms of this Draft Prospectus Application Form The Form in terms of which the prospective investors shall apply for our Equity Shares in the Issue ASBA/ Application Applications Supported by Blocked Amount (ASBA) means an application Supported by Blocked for Subscribing to the Issue containing an authorization to block the Amount. application money in a bank account maintained with SCSB ASBA Account Account maintained with SCSBs which will be blocked by such SCSBs to the extent of the Application Amount ASBA Application Locations at which ASBA Applications can be uploaded by the SCSBs, Location(s)/ Specified namely Mumbai, New Delhi, Chennai, Kolkata, Ahmedabad, Bangalore, Cities Hyderabad and Pune. ASBA Investor/ASBA Any prospective investor(s)/applicants(s) in this Issue who apply(ies) applicant through the ASBA process The banks which are clearing members and registered with SEBI as Banker Banker(s) to the Issue/ to an Issue with whom the Escrow Account will be opened and in this case Escrow Collection Bank(s). being ICICI Bank Limited. The basis on which Equity Shares will be Allotted to the successful Basis of Allotment Applicants under the Issue and which is described under chapter titled Issue Procedure beginning on page 268 of this Draft Prospectus Such branch of the SCSBs which coordinate Applications under this Issue Controlling Branch by the ASBA Applicants with the Registrar to the Issue and the Stock Exchanges and a list of which is available at or at such other website as may be prescribed by SEBI from time to time Demographic Details The demographic details of the Applicants such as their address, PAN, occupation and bank account details Depositories registered with SEBI under the Securities and Exchange Depositories Board of India (Depositories and Participants) Regulations, 1996, as amended from time to time, being NSDL and CDSL Depository Participant A Depository Participant as defined under the Depositories Act, 1996 Such branches of the SCSBs which shall collect the ASBA Forms from the Designated Branches ASBA Applicants and a list of which is available at or at such other website as may be prescribed by SEBI from time to time The date on which funds are transferred from the Escrow Account or the amount blocked by the SCSBs is transferred from the ASBA Account, as Designated Date the case may be, to the Public Issue Account or the Refund Account, as appropriate, after the Issue is closed, following which the Equity Shares shall be allotted/transfer to the successful Applicants Designated Stock Exchange SME Platform of BSE Limited The Draft Prospectus dated April 13, 2015 issued in accordance with Draft Prospectus section 26 of the Companies Act, 2013 and filed with the BSE under SEBI (ICDR) Regulations Eligible NRIs NRIs from jurisdictions outside India where it is not unlawful to make an issue or invitation under the Issue and in relation to whom this Draft Page 4 of 370

6 Term Escrow Account(s) Escrow Agreement General Document First/ Sole Applicant Information Issue/ Issue Size/ Initial Public Issue/ Initial Public Offer/ Initial Public Offering/ IPO Issue Agreement Issue Closing date Issue Opening Date Issue Period Issue Price Issue Proceeds Lead Manager/ LM Listing Agreement Market Making Agreement Market Maker Market Maker Reservation Portion Mutual Fund(s) NIF Net Issue Description Prospectus constitutes an invitation to subscribe to the Equity Shares offered herein Account(s) opened with the Escrow Collection Bank(s) for the Issue and in whose favour the Applicants (excluding ASBA Applicants) will issue cheques or drafts in respect of the Application Amount when submitting any Application(s) pursuant to this Issue Agreement dated April 3, 2015 to be entered into by our Company, the Registrar to the Issue, the Lead Manager, and the Escrow Collection Bank(s) for collection of the Application Amounts and where applicable, refunds of the amounts collected to the Applicants (excluding ASBA Applicants) on the terms and conditions thereof The General Information Document for investing in public issues prepared and issued in accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013, notified by SEBI. The Applicant whose name appears first in the Application Form or Revision Form Public Issue of 11,35,000 Equity Shares of face value of Rs. 10/- each fully paid of Zeal Aqua Limited for cash at a price of Rs. 122/- per Equity Share (including a premium of Rs. 112/- per Equity Share) aggregating Rs lakhs. The agreement dated April 3, 2015 between our Company and the Lead Manager, pursuant to which certain arrangements are agreed to in relation to the Issue. The date on which Issue closes for subscription The date on which Issue opens for subscription The period between the Issue Opening Date and the Issue Closing Date inclusive of both the days during which prospective Investors may submit their application The price at which the Equity Shares are being issued by our Company under this Draft Prospectus being Rs. 122/- per Equity Share of face value of Rs. 10 each fully paid Proceeds from the Issue that will be available to our Company, being Rs Lakhs Lead Manager to the Issue in this case being Pantomath Capital Advisors Private Limited, SEBI registered Category I Merchant Banker The Equity Listing Agreement to be signed between our Company and the SME Platform of BSE Limited Market Making Agreement dated April 3, 2015 between our Company, Lead Manager and Market Maker. Market Maker appointed by our Company from time to time, in this case being Choice Equity Broking Private Limited, who has agreed to receive or deliver the specified securities in the market making process for a period of three years from the date of listing of our Equity Shares or for any other period as may be notified by SEBI from time to time The Reserved Portion of 60,000 Equity Shares of face value of Rs. 10 each fully paid for cash at a price of Rs. 122/- per Equity Share aggregating Rs lakhs for the Market Maker in this Issue A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996, as amended from time to time National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated November 23, 2005 of Government of India published in the Gazette of India The Issue excluding the Market Maker Reservation Portion of 10,75,000 Equity Shares of face value of Rs. 10 each fully paid for cash at a price of Page 5 of 370

7 Net Proceeds Term Non Institutional Investors OCB/ Overseas Corporate Body Payment through electronic transfer of funds Person/ Persons Prospectus Public Issue Account Qualified Institutional Buyers or QIBs Refund Account (s) Refund Bank(s) / Refund Banker(s) Refund through electronic transfer of funds Registrar /Registrar to the Issue Retail Individual Investor Revision Form Description Rs. 122/- per Equity Share aggregating Rs lakhs by our Company The Issue Proceeds, less the Issue related expenses, received by the Company. All Applicants that are not Qualified Institutional Buyers or Retail Individual Investors and who have applied for Equity Shares for an amount more than Rs. 2,00,000 A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs, including overseas trusts in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under the Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time. OCBs are not allowed to invest in this Issue Payment through NECS, NEFT or Direct Credit, as applicable Any individual, sole proprietorship, unincorporated association, unincorporated organization, body corporate, corporation, company, partnership, limited liability company, joint venture, or trust or any other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as the context requires The Prospectus to be filed with RoC containing, inter-alia, the issue size, the issue opening and closing dates and other information Account opened with the Banker to the Issue i.e. ICICI Bank under Section 40 of the Companies Act, 2013 to receive monies from the Escrow Account and the SCSBs from the bank accounts of the ASBA Applicants on the Designated Date QIBs, as defined under the SEBI ICDR Regulations, including public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual fund registered with SEBI, FPI other than Category III FPI registered with SEBI, multilateral and bilateral development financial institution, venture capital fund registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with Insurance Regulatory and Development Authority, provident fund with minimum corpus of Rs. 2,500 lakhs, pension fund with minimum corpus of Rs. 2,500 lakhs, NIF, insurance funds set up and managed by army, navy or air force of the Union of India and insurance funds set up and managed by the Department of Posts, India Account(s) to which Application monies to be refunded to the Applicants (excluding the ASBA Applicants) shall be transferred from the Public Issue Account Bank(s) which is / are clearing member(s) and registered with the SEBI as Bankers to the Issue at which the Refund Accounts will be opened, in this case being ICICI Bank Refund through NECS, Direct Credit, RTGS, NEFT or the ASBA process, as applicable Registrar to the Issue, in this case being Bigshare Services Private Limited having registered office at E -2/, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri East, Mumbai Individual Applicants, or minors applying through their natural guardians, including HUFs (applying through their Karta), who apply for an amount less than or equal to Rs 2,00,000 The form used by the Applicants to modify the quantity of Equity Shares in any of their Application Forms or any previous Revision Form(s) Page 6 of 370

8 Term SCSB/ Self Certified Syndicate Banker SME Platform of BSE Underwriter Underwriting Agreement Working Day Description Shall mean a Banker to an Issue registered under SEBI (Bankers to an Issue) Regulations, 1994, as amended from time to time, and which offer the service of making Application/s Supported by Blocked Amount including blocking of bank account and a list of which is available on Intermediaries or at such other website as may be prescribed by SEBI from time to time The SME Platform of BSE for listing of Equity Shares offered under Chapter XB of the SEBI (ICDR) Regulations which was approved by SEBI as an SME Exchange on September 27, 2011 Pantomath Capital Advisors Private Limited The agreement dated April 3, 2015 entered into between the Underwriter and our Company (i) Till Application / Issue closing date: All days other than a Saturday, Sunday or a public holiday; (ii) Post Application / Issue closing date and till the Listing of Equity Shares: All days other than a Sunday or a public holiday, and on which commercial banks in Gujarat and / or Mumbai are open for business in accordance with the SEBI circular no. CIR/CFD/DIL/3/2010 dated April 22, 2010 Technical and Industry Terms Term BCG BFDAs CSO DIPP EMS FAO ICAR IMF LIFDCs MPEDA OECD PIB WSD WSSV WTO SHRIMPS CIFE S.O.P KVA Description Boston Consulting Group Brackish water Fish Farmers Development Agencies Central Statistical Organisation Department of Industrial Policy and Promotion Early Mortality Syndrome Food and Agricultural Organisation Indian Council of Agricultural Research International Monetary Fund Low-Income Food-Deficit Countries Marine Products Export Development Authority Organisation for Economic Cooperation and Development Press Information Bureau White Spot Disease White Spot Syndrome Virus World Trade Organization A small free-swimming crustacean with an elongated body, typically marine and frequently of commercial importance as food. Central Institute of Fisheries Education Standard Operating Procedures Kilovolt-ampere Page 7 of 370

9 Conventional and General Terms/ Abbreviations A/C AGM AIF AS A.Y. BR BSE CAGR CDSL CFO CMD CIN Term Companies Act Companies Act, 2013 Depositories Depositories Act DIN DP DP ID EBIDTA ECS EGM ESIC ESOP ESPS EPS FDI FCNR Account FEMA FII(s) FIs FIPB FPI(s) FVCI F.Y./FY GAAP GDP GIR Number GoI/ Government HNI HUF Page 8 of 370 Zeal Aqua Limited Draft Prospectus Description Account Annual General Meeting Alternative Investments Fund Accounting Standards as issued by the Institute of Chartered Accountants of India Assessment Year Base Rate BSE Limited Compounded Annual Growth Rate Central Depository Services (India) Limited Chief Financial Officer Chairman and Managing Director Corporate Identification Number Companies Act, 1956 (without reference to the provisions thereof that have ceased to have effect upon notification of the Notified Sections) and the Companies Act, The Companies Act, 2013, to the extent in force pursuant to the notification of the notified sections NSDL and CDSL; Depositories registered with the SEBI under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, as amended from time to time The Depositories Act, 1996, as amended from time to time. Director Identification Number Depository Participant Depository Participant s Identity Earnings before interest, depreciation, tax, amortization and extraordinary items Electronic Clearing Services Extraordinary General Meeting Employee State Insurance Corporation Employee Stock Ownership Plan Employee Stock Purchase Scheme Earnings Per Share Foreign Direct Investment Foreign Currency Non Resident Account Foreign Exchange Management Act 1999, as amended from time to time and the regulations framed there under Foreign Institutional Investors Financial Institutions The Foreign Investment Promotion Board, Ministry of Finance, Government of India Foreign Portfolio Investor Foreign Venture Capital Investor registered under the Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000 Financial Year Generally Accepted Accounting Principles Gross Domestic Product General Index Registry number Government of India High Networth Individual Hindu Undivided Family

10 Page 9 of 370 Zeal Aqua Limited Draft Prospectus Term Description ICDR Regulations/ SEBI SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 Regulations/ SEBI (ICDR) as amended from time to time Regulations Indian GAAP Generally Accepted Accounting Principles in India ICAI Institute of Chartered Accountants of India IFRS International Financial Reporting Standards IPO Initial Public Offering IT Rules The Income Tax Rules, 1962, as amended from time to time INR Indian National Rupee The officers declared as a Key Managerial Personnel and as mentioned in Key Managerial Personnel / the chapter titled Our Management beginning on page 143 of this Draft KMP Prospectus LPH liter per hour Ltd. Limited MD Managing Director Mtr Meter N/A or N.A. Not Applicable NAV Net Asset Value NECS National Electronic Clearing Services NEFT National Electronic Fund Transfer The aggregate of the paid up share capital, share premium account, and Net Worth reserves and surplus (excluding revaluation reserve) as reduced by the aggregate of miscellaneous expenditure (to the extent not adjusted or written off) and the debit balance of the profit and loss account NOC No Objection Certificate NR Non Resident NRE Account Non Resident External Account Non Resident Indian, is a person resident outside India, who is a citizen of NRI India or a person of Indian origin and shall have the same meaning as ascribed to such term in the Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited p.a. per annum PAN Permanent Account Number PAT Profit After Tax Pvt. Private PBT Profit Before Tax P/E Ratio Price Earnings Ratio QIB Qualified Institutional Buyer RBI Reserve Bank of India RBI Act The Reserve Bank of India Act, 1934, as amended from time to time RoNW Return on Net Worth Rs. / INR Indian Rupees RTGS Real Time Gross Settlement SCRA Securities Contracts (Regulation) Act, 1956 SCRR Securities Contracts (Regulation) Rules, 1957 SCSB Self Certified Syndicate Bank SEBI Securities and Exchange Board of India SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Insider Trading Regulations The SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended from time to time, including instructions and clarifications issued by SEBI

11 Term SEBI Takeover Regulations /Takeover Regulations / Takeover Code SICA SME SSI Undertaking Stock Exchange (s) Sq. Sq. mtr TAN TRS TIN TP TNW u/s UIN US/ U.S. / USA/United States USD or US$ U.S. GAAP UOI WDV WTD w.e.f. YoY from time to time Description Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 Sick Industrial Companies (Special Provisions) Act, 1985, as amended from time to time Small Medium Enterprise Small Scale Industrial Undertaking SME Platform of BSE Limited Square Square Meter Tax Deduction Account Number Transaction Registration Slip Taxpayers Identification Number Term Premia Total Net Worth Under Section Unique Identification Number United States of America United States Dollar Generally accepted accounting principles in the United States of America Union of India Written Down Value Whole-time Director With effect from Year over year Notwithstanding the following: - i. In the section titled Main Provisions of the Articles of Association beginning on page 316 of this Draft Prospectus, defined terms shall have the meaning given to such terms in that section; ii. In the section titled Financial Statements beginning on page 173 of this Draft Prospectus, defined terms shall have the meaning given to such terms in that section; iii. In the section titled Risk Factor beginning on page 13 of this Draft Prospectus, defined terms shall have the meaning given to such terms in that section; iv. In the chapter titled Statement of Possible Tax Benefits beginning on page 85 of this Draft Prospectus, defined terms shall have the meaning given to such terms in that chapter; and v. In the chapter titled Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 204 of this Draft Prospectus, defined terms shall have the meaning given to such terms in that section. Page 10 of 370

12 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA All references to India are to the Republic of India and all references to the Government are to the Government of India. FINANCIAL DATA Unless stated otherwise, the financial data included in this Draft Prospectus are extracted from the restated financial statements of our Company, prepared in accordance with the applicable provisions of the Companies Act, Indian GAAP and restated in accordance with SEBI (ICDR) Regulations, as stated in the report of our Statutory Auditors, set out in the section titled Financial Statements beginning on page 173 this Draft Prospectus. Our restated financial statements are derived from our audited financial statements prepared in accordance with Indian GAAP and the Companies Act, and have been restated in accordance with the SEBI (ICDR) Regulations. Our fiscal year commences on April 1 st of each year and ends on March 31 st of the next year. All references to a particular fiscal year are to the 12 month period ended March 31 st of that year. In this Draft Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off. All decimals have been rounded off to two decimal points. There are significant differences between Indian GAAP, IFRS and US GAAP. The Company has not attempted to quantify their impact on the financial data included herein and urges you to consult your own advisors regarding such differences and their impact on the Company s financial data. Accordingly to what extent, the financial statements included in this Draft Prospectus will provide meaningful information is entirely dependent on the reader s level of familiarity with Indian accounting practices / Indian GAAP. Any reliance by persons not familiar with Indian Accounting Practices on the financial disclosures presented in this Draft Prospectus should accordingly be limited. Any percentage amounts, as set forth in Risk Factors, Our Business, Management s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Draft Prospectus unless otherwise indicated, have been calculated on the basis of the Company s restated financial statements prepared in accordance with the applicable provisions of the Companies Act, Indian GAAP and restated in accordance with SEBI (ICDR) Regulations, as stated in the report of our Peer Reviewed Auditor, set out in the section titled Financial Statements beginning on page 173 of this Draft Prospectus. CURRENCY OF PRESENTATION In this Draft Prospectus, references to Rupees or Rs. or INR are to Indian Rupees, the official currency of the Republic of India. All references to $, US$, USD, U.S. $ or U.S. Dollars are to United States Dollars, the official currency of the United States of America. All references to million / Million / Mn refer to one million, which is equivalent to ten Lakhs or ten lakhs, the word Lakhs / Lakhs / Lac means one hundred thousand and Crore means ten million and billion / bn./ Billions means one hundred crores. INDUSTRY & MARKET DATA Unless otherwise stated, Industry & Market data used throughout this Draft Prospectus has been obtained or derived from industry and government publications, publicly available information and sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Draft Prospectus is reliable, it has not been independently verified. Similarly, internal Company reports, while believed by us to be reliable, have not been verified by any independent sources. Further the extent to which the market and industry data presented in this Draft Prospectus is meaningful depends on the reader s familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering methodologies in the industry in which we conduct our business, and methodologies and assumptions may vary widely among different industry sources. Page 11 of 370

13 FORWARD LOOKING STATEMENT Zeal Aqua Limited Draft Prospectus This Draft Prospectus contains certain forward-looking statements. These forward looking statements can generally be identified by words or phrases such as aim, anticipate, believe, expect, estimate, intend, objective, plan, project, shall, will, will continue, will pursue or other words or phrases of similar meaning. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results and property valuations to differ materially from those contemplated by the relevant forward looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others: General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies; Changes in laws and regulations relating to the sectors/areas in which we operate; Increased competition in Aquaculture industry; Factors affecting Aquaculture Industry; Our ability to meet our capital expenditure requirements; Fluctuations in operating costs; Our ability to attract and retain qualified personnel; Changes in political and social conditions in India, the monetary and interest rate policies of India and other countries; Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; The performance of the financial markets in India and globally; Any adverse outcome in the legal proceedings in which we are involved; Our failure to keep pace with rapid changes in technology; The occurrence of natural disasters or calamities; Other factors beyond our control; Our ability to manage risks that arise from these factors; Conflict of Interest with affiliated companies, the promoter group and other related parties; and Changes in government policies and regulatory actions that apply to or affect our business. For a further discussion of factors that could cause our actual results to differ, refer to section titled Risk Factors and chapter titled Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on pages 13 and 204 respectively of this Draft Prospectus. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Future looking statements speak only as of the date of this Draft Prospectus. Neither we, our Directors, Lead Manager, Underwriters nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, the LM and our Company will ensure that investors in India are informed of material developments until the grant of listing and trading permission by the Stock Exchange. Page 12 of 370

14 SECTION II - RISK FACTORS Zeal Aqua Limited Draft Prospectus An investment in Equity Shares involves a high degree of financial risk. You should carefully consider all information in this Draft Prospectus, including the risks described below, before making an investment in our Equity Shares. To obtain a better understanding, you should read this section in conjunction with the chapters titled Our Business and Management s Discussion and Analysis of Financial Condition and Results of Operations as Reflected In The Financial Statements beginning on page 110 and 204 of this Draft Prospectus. If any of the following risks actually occur, our business, results of operations and financial condition could suffer, the trading price of the Equity Shares could decline, and you may lose all or part of your investment. This section addresses general risks associated with the industry in which we operate and specific risks associated with our Company. In making an investment decision, prospective investors must rely on their own examination of our Company and the terms of this offer including the merits and risks involved. Any potential investor in, and subscriber of, the Equity Shares should also pay particular attention to the fact that we are governed in India by a legal and regulatory environment in which some material respects may be different from that which prevails in other countries. The risks set out in this Draft Prospectus may not be exhaustive and additional risks and uncertainties not presently known to us, or which we currently deem to be immaterial, may arise or may become material in the future. Further, some events may have a material impact from a qualitative perspective rather than a quantitative perspective and may be material collectively rather than individually. This Draft Prospectus also contains forward-looking statements that involve risks and uncertainties. Our Company s actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including the considerations described below and in the chapter titled Forward Looking Statements beginning on page 12 of this Draft Prospectus. Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein. Unless otherwise stated, the financial information of our Company used in this section is derived from our restated financial statements prepared in accordance with Indian GAAP and the Companies Act and restated in accordance with the SEBI ICDR Regulations. The risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality. 1. Some risks may not be material individually but may be material when considered collectively. 2. Some risks may have an impact which is qualitative though not quantitative. 3. Some risks may not be material at present but may have a material impact in the future. The financial and other related implications of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However, there are risk factors where the impact may not be quantifiable and hence the same has not been disclosed in such risk factors. Unless otherwise stated, we are not in a position to specify or quantify the financial or other risks mentioned herein. For capitalized terms used but not defined in this chapter, refer to the chapter titled Definitions and Abbreviations beginning on page 3 of this Draft Prospectus. The numbering of the risk factors has been done to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over another. Page 13 of 370

15 The risk factors are classified as under for the sake of better clarity and increased understanding: Risk Factors Internal Risk Factors External Risk Factors Business Related Issue Related Industry Related Other Risks INTERNAL RISKS BUSINESS RISKS/COMPANY SPECIFIC RISKS 1. Our Company is involved in certain legal proceedings. Any adverse decision in such proceedings may render us / them liable to liabilities / penalties and may adversely affect our / their business and results of operations. The Assistant Commissioner, IT, by an assessment order dated March 27, 2015 for the AY , held vide provisions of Income Tax Act including section 68, that the share capital and share premium of Rs. 4,00,00,000 received by our Company in past, will be considered as Income as the explanation offered by the Company has not only been found unsatisfactory but also incorrect as per the inquiry conducted by the department of Income Tax. Further, there are certain unexplained expenditures, capital expenditure and late payment of Employee Contribution towards Provident Fund; which are being disallowed by the Assistant Commissioner, IT and are added back to our Income. Our Company is in the process of exploring further course of action including challenging the aforesaid order before the appropriate Appellate authority. Further, penalty proceedings under section 271(1)(c) read with section 274 of the Income Tax Act, for furnishing inaccurate particulars and concealment of income are also being initiated against our Company. For further details, refer Chapter titled Outstanding Litigations and Material Developments of the Draft Prospectus beginning on page 234. Our Company have also been served a show cause notice, in respect of commercial taxes for the Financial Year Pursuant to the hearing held in the matter, our Company is awaiting the final order. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. Any adverse decision may render us / them liable to liabilities / penalties and may Page 14 of 370

16 adversely affect our / their business and results of operations. A classification of these legal and other proceedings are given in the following table: Nature of litigation Litigation against our Company: Indirect Tax Litigation against our Company: Civil/ Criminal cases Securities/ Economic/ Tax Cases (Rs. In Lakhs) Financial implications Nil 1 Non Quantifiable Nil ** Direct Tax* Litigation by our Company Nil Nil Nil * This demand relates to AY ** Amount relating to penalty proceeding under section 271(1)(c) read with section 274 of the Income Tax Act is unascertainable. The table above does not include those penalties, interests and costs, if any, which may be imposed or which may have been pleaded but not quantified in the course of legal proceedings, or which the Court / Tribunal otherwise has the discretion to impose. The imposition and amount of such penalties / interests / costs are at the discretion of the court / tribunal where the case is pending. Such liability, if any, would crystallize only on the order of the tribunal where the case(s) is / are pending. Any adverse decision on any of the matter stated above could have significant impact on the Company s operations and on financial results. For further details regarding these legal proceedings, please refer to the chapter titled Outstanding Litigations and Material Developments beginning on page 234 of this Draft Prospectus. 2. Our Company has not complied with certain statutory provisions under Companies Act Such non-compliances/lapses may attract penalties. Our Company has not filed return of allotments and Annual Returns appropriately with respect to shareholding records, such as the following: a. Names of certain joint holders are not mentioned in the Annual Return filed by our Company; b. In respect of the shares in our Company held by certain partnership firms, the Annual Returns and return of allotments do not mention the fact that shares were held by the partners on behalf of the firms concerned. Though our Company has appropriately maintained our Register of Members, Transfer Deeds and issued share certificates appropriately, inappropriate disclosures, as aforesaid, may in the future render us liable to statutory penalties. Further, our Company has delayed in complying with reporting requirements such as registration of resolutions, filing of form for change in designation of directors etc, as required to be filed under the Companies Act to the Registrar of Companies. Such delay/non-compliance may in the future render us liable to statutory penalties and disallowing the resolutions, which may have consequence of violation of certain statutory provisions under Companies Act Any penalty or action taken by any regulatory authorities in future for non compliance with provisions of accounting standards and other laws could impact the financial position of our Company. Our Company have not complied with certain Accounting Standards including disclosures related party transactions and Cash Flow Statement, in the past. Although, no show cause notice with respect the same has been received by the Company till date, we cannot assure penalties may not arise in future. Any penalty imposed for such non-compliance could affect our financial condition to that Page 15 of 370

17 Page 16 of 370 Zeal Aqua Limited Draft Prospectus extant. However, our Company is complying with all the accounting standards and has given effects in the restated financials statements for such non compliances. 4. Our business of Shrimp Farming is seasonal in nature. Our business is subject to seasonality with a significant portion of revenue generated primarily during the third quarter of each fiscal year. This seasonality is due to the harvesting of shrimps during that period. Our Company begins partial harvesting from 100 to 120 days of culture and final harvesting begins after 180 days from culture. Since our major source of revenue is from the sale of final harvesting of shrimps, our revenues are concentrated at the third quarter. During the slack period, our Company undertakes cleaning, maintenance and revamping of its ponds and other infrastructural facilities due to which our Company is able to produce better quality of prawns by exposing the prawns to a better environment and preventing them from associated diseases. However, seasonal nature of our business may have significant adverse impact on our cash flows and business operations. Accordingly, investors should consider our business and prospects in light of the risks, losses and challenges of aquaculture that we face and should not rely on our results of operations for any prior periods as an indication of our future performance. 5. Our entire production facility is located in the state of Gujarat. Further we generate our major sales from our operations in certain geographical regions especially Gujarat and Maharashtra. Any adverse developments affecting our operations in these regions could have an adverse impact on our revenue and results of operations. Our Company currently carries on its aquaculture activities only in the state of Gujarat. Further our major customer base is concentrated in certain regions in the state of Gujarat and Maharashtra. Such geographical concentration of our aquaculture business in these regions heightens our exposure to adverse developments related to competition, as well as economic and demographic changes in these regions which may adversely affect our business prospects, financial conditions and results of operations. We may not be able to leverage our experience in regions of Gujarat & Maharashtra to expand our operations in other parts of India and overseas markets, particularly as the Company plans to foray into processing of shrimps which shall open avenues to international markets for the Company and further expand its operations. Factors such as competition, culture, regulatory regimes, business practices and customs, industry needs, transportation, in other markets where we may expand our operations may differ from those in Gujarat & Maharashtra, and our experience in these places may not be applicable to other markets. In addition, as we enter new markets and geographical areas, we are likely to compete not only with national and international players, but also local players who might have an established local presence, are more familiar with local regulations, business practices and industry needs, have stronger relationships with local contractors, farmers, relevant government authorities, and who are in a stronger financial position than us, all of which may give them a competitive advantage over us. Our inability to expand into areas outside our present market may adversely affect our business prospects, financial conditions and results of operations. While our management believes that the Company has requisite expertise and vision to grow and mark its presence in other markets going forward, investors should consider our business and prospects in light of the risks, losses and challenges faced by us and should not rely on our results of operations for any prior periods as an indication of our future performance. 6. We operate in an environment sensitive industry. The shrimps we produce may be prone to certain diseases spread in the environment. Our Company is majorly into farming of shrimps. One of the species of shrimps called Black Tiger produced by us is quite vulnerable to diseases especially the White Spot Disease. In view of our management, the introduction of specific pathogen free Vannamei species has improved the prospects of the shrimp industry. Vannamei species was introduced after host of trials and the brood stock is quarantined in Chennai before their release to hatcheries for farming. These being a specific pathogen free species, the incidence of diseases are expected to be low. Further the Costal Aqua Culture Authority conducts frequent checks to ensure the bio security requirements are followed. However, if we are unsuccessful in controlling these risks, our business may be materially and

18 Page 17 of 370 Zeal Aqua Limited Draft Prospectus adversely affected. Accordingly, investors should consider our business and prospects in light of the risks, losses and challenges of aquaculture that we face and should not rely on our results of operations for any prior periods as an indication of our future performance. 7. We do not possess any control on the biosecurity measures employed at different level of operations. Improper measures may lead to risk of development of new infections/ diseases. Biosecurity can be defined as the set of procedures undertaken to prevent, control and eradicate infectious diseases in organisms. Although we have good management practices and a biosecurity program in place, there may be possibility of lack of biosecurity measures at our farms under collaboration agreements as also at farms under satellite farming. This may develop the risk of new diseases among the shrimps. If we are unsuccessful in controlling these risks, our business may be materially and adversely affected. Accordingly, investors should consider our business and prospects in light of the risks, losses and challenges of aquaculture that we face and should not rely on our results of operations for any prior periods as an indication of our future performance. 8. We are hugely dependent on a single supplier for supply of one of our important raw materials i.e. feeds. Further, our supplier is also engaged in the same business segment i.e. processing and exporting of shrimps in which we propose to enter. We are an Authorised Dealers for Avanti Feeds Limited and are hugely dependent on them for supply of our one of the important raw material i.e. feeds. Avanti Feeds Limited is a well-established player in the aquaculture industry. They are engaged in manufacturing of Prawn and Fish Feeds as well as processing and export of shrimps. With our entry into the processing industry, we may pose direct competition to processing business of Avanti Feeds Limited, consequent to which Avanti Feeds Limited may modify the terms and conditions of our existing business relationships. Any unfavourable outcome may affect our business and results of operations. 9. Our top ten customers contribute approximately 71% of our revenues for the year ended March 31, Any loss of business from one or more of the them may adversely affect our revenues or profitabilities Our top ten customers contribute approximately 71% of our revenue for the financial year ended March 31, Any decline in our quality standards, growing competition and any change in demands may adversely affect our ability to retain them. We cannot assure that we shall generate the same quantum of business or any business at all from these customers, and loss of business from one or more of them may adversely affect our revenue and profitability. However, the composition and revenue generated from these customers might change as we continue to add new customers in normal course of business. We intend to retain our customers by adhering to strict quality standards by providing better value to each customers and thereby increasing our engagement with new and existing customer base that presents a substantial opportunity for growth. 10. Our Company does not own any warehouses for storage of shrimps. We do not own any warehouses i.e. cold storage facilities for storage of shrimps. Shrimps being a perishable commodity, absence of storage facilities may lead to spoilage risk. Currently, the customer arranges for the transportation and storage facilities. In case there is delay on part of the customer to collect the shrimps produced or there is a cancellation of the sales order, our profitability may be adversely affected due to risk of spoilage of shrimps. However, our Company is in the process of setting up of a processing unit for storage of shrimps which shall include cold storage facilities. But, in case our Company would be unable to set up processing plant, our business operations and financial results could have significant adverse impact. 11. We are subject to risks arising from exchange rate fluctuations. Our major sales are made to the processing houses of shrimps who in turn export these shrimps. Since the end use of our products is in international markets, the fluctuation in exchange rate between the Rupee and other currencies may affect the sales price which we are able to fetch. Further after setting up our own processing unit, we shall directly cater to international markets which shall yield foreign earnings for us. Since, the exchange rate between the Rupee and other currencies is variable and may continue to fluctuate in future, such fluctuations may affect the cost of

19 goods rendered in foreign currency terms. Any adverse fluctuations with respect to the exchange rate of any foreign currency for Indian Rupees may affect the Company s profitability and results of operations. 12. We do business with our customers on purchase order basis and do not have long-term contracts with most of them. Our business is conducted on purchase order basis which in turn is dependent on global requirements for shrimps. We do not have long-term contracts with most of our customers and there can be no assurance that we will continue to receive repeat orders from any of them. Further, even if we were to continue receiving orders from our customers, there can be no assurance that they will be on the same terms, and the new terms may be less favorable to us than those under the present terms. Our management attempts to ensure customer satisfaction and continuing repeat orders from them endorse our attempts. 13. Increased raw material, labour and other costs, may adversely affect our results of operation and feasibility of our development plan. As there is a significant amount of farming activity in our development plan, our business would be affected by the availability, cost and quality of raw materials and labour. The prices and supply of raw materials and labour depend on factors not under our control, including general economic conditions, competition, production levels, transportation costs and import duties. Additionally, inflation would play a critical role in the cost of farming, and could directly impact the profitability of the development and the peak funding requirements. We cannot assure you that we will be able to procure quality raw materials at competitive prices or at all which may adversely affect our business. In addition, during periods of significant increases in the price of seeds, feeds or probiotics, we may not be able to pass price increases through to our customers, which could reduce or eliminate our profits with respect to such development. Our principal raw materials include seeds, feeds and probiotics. Any increase in the costs of our principal raw materials may adversely affect our business, financial condition and results of operation. 14. We are planning to set-up a processing unit for shrimps which shall be a new line of business for us. Our Company is in the process of setting up of a processing unit for storage and further processing of harvested shrimps. We may face initial difficulties such as technical glitches, resource crunch, operations mismanagement, etc. in the process of setting up the processing unit. We may also face competition from the established processors. Further we do not have an identified international customer base and shall also have to develop a market for the sales of processed shrimps. All these factors may result in slow growth over the initial years of development and affect the profitability of the company. 15. Conflicts of interest may arise out of common business undertaken by our Company and our Group Entities. Our Group Entities are authorized to carry out business similar to that of our Company. As a result, conflicts of interests may arise in allocating business opportunities amongst our Company and our Group Entities in circumstances where our respective interests diverge. In cases of conflict, our Promoter may favour other companies in which our Promoter has interests. There can be no assurance that our Promoter or our Group Entities or members of the Promoter Group will not compete with our existing business or any future business that we may undertake or that their interests will not conflict with ours. Any such present and future conflicts could have a material adverse effect on our reputation, business, results of operations and financial conditions. For further details of business activities of our Group Entities, please refer to the chapter titled Our Group Entities beginning on page 161 of the Draft Prospectus. 16. Our Company is dependent on third party transportation providers for the delivery of raw materials and sales of shrimps and any disruption in their operations or a decrease in the quality of their services could affect our Company's reputation and results of operations. Page 18 of 370

20 Page 19 of 370 Zeal Aqua Limited Draft Prospectus Our Company uses third party transportation providers for delivery of our raw materials and sales of shrimps. Though our business has not experienced any disruptions due to transportation strikes in the past, any future transportation strikes may have an adverse effect on our business. These transportation facilities may not be adequate to support our existing and future operations. In addition raw materials or shrimps may be lost or damaged in transit for various reasons including occurrence of accidents or natural disasters. There may also be delay in receipt of raw materials which may also affect our business and results of operation negatively. Also since shrimps are perishable commodity, delay in delivery of shrimps may result in huge losses. An increase in the freight costs or unavailability of freight for transportation of our raw materials may have an adverse effect on our business and results of operations. Further, disruptions of transportation services due to weather-related problems, strikes, lock-outs, inadequacies in the road infrastructure and port facilities, or other events could impair ability to procure raw materials and shrimps on time. Any such disruptions could materially and adversely affect our business, financial condition and results of operations. 17. Our Company faces competition in its business from other aquaculture players. The aquaculture industry in India, while fragmented and unorganised, is highly competitive and our Company faces competition from other aquaculture players. The industry is dominated by host of regional players. There are a number of competitors having better financials and other resources who have achieved greater market penetration than our Company has, in the markets in which it competes. Our Company experience competition in the future from potential competitors with significant operations elsewhere in India. This may affect our relative market share and results from operations. 18. We do not own the lands on which our business activities are being carried on. Currently, our Company has entered into various collaboration agreements with third parties for usage of lands owned by these parties against specified consideration. These collaboration agreements are subject to renewal after the agreed period of time, which is generally for 5 years. In case of any unfavorable changes in the terms and conditions of the agreement, any unexpected cancellations of the agreement, inability on the part of the Company to renew the collaboration agreements may affect our results of operations. Further these lands are also not in the name of third parties but allotted to them by Government subject to certain terms and conditions for a specified period. Thus any failure on the part of third parties to fulfil the terms and conditions leading to revocation of land agreement, any change in the government policies with respect to allotment of the land or inability of the third party to renew land agreement post the specified period, might directly impact the scale of operations of our Company. 19. Certain agreements may not be formalised or inadequately stamped or may not have been registered as a result of which our operations may be impaired. We have not formalised certain collaboration agreements with some of the third parties. Further, some of our partnership deeds are not traceable. Also, few of our agreements may not be adequately stamped or registered. The effect of informal agreements, inadequate stamping is that the document is not admissible as evidence in legal proceedings and parties to that agreement may not be able to legally enforce the same, except formalizing the agreement or after paying a penalty for inadequate stamping. Our Company has already initiated the process of formalising the collaboration agreements and is making its best efforts to retrieve the partnership deeds. 20. We do not own the premises at which our Registered Office is located. We do not own the premises at which our Registered Office is situated. We have taken the premises where our registered office is located on lease from GIDC. The lease is valid for a period of 99 years, with an option to renew the same for a further period of 99 years. However, our lease deed imposes certain restrictions and covenants, breach of which may lead to termination of deed, thereby adversely affecting our operations. 21. Certain of our Group entities, have incurred losses during the recent Fiscal year. The following group entities have incurred losses in recent Fiscal years:- (in lakhs)

21 Page 20 of 370 Zeal Aqua Limited Draft Prospectus Sr No. Name of Company Profit/Loss-Fiscal Year Agni Aqua Farm (0.07) 2 Mukesh Hotels Private Limited (0.19) 3 Navik Aqua Private Limited (0.19) 4 Susan Aqua Private Limited (0.19) 5 Goldpink Aqua Culture Private Limited (0.19) 6 King Marine Products Private Limited (1.19) For further details on our Group entities, see the chapter titled Our Group Entities on page 161 of this Draft Prospectus. 22. Our Company is yet to establish its marketing set up across the country and in international markets. At present major activity and market share of our Company is concentrated in the state of Gujarat. The marketing setup of our Company will gradually expand to other states of our country. With the setting up of the processing unit, our company needs to build distribution networks across international markets as well. Our Company may need to incur marketing expenses to establish its business in new markets. Marketing costs and development of market set-ups across new channels, might affect our Company s expansion plans and profitability. 23. Increasing thrust on R&D/technology increasing costs. The aquaculture industry is sensitive to environment and our Company is dependent on the healthy catch of shrimp. After introduction of the new species namely Vannamei, and the advancements made in shrimp rearing and feeding technologies, the occurrence of diseases has decreased considerably. However, the industry is prone to environmental changes. The Company has to constantly upgrade its technologies and its products in order to minimize its dependence on environmental factors. Our company has an in-built research team to constantly test and monitor its operations. Our management believes in technological advancement of the business operations which is evidenced by the installations of Auto-feeder systems, Auto PH level testers among others. Our Company makes constant and conscious efforts to match the pace of technological advancements with the business requirements 24. We have not applied for certain statutory and regulatory approvals, registrations and licenses. Further, our inability to renew or maintain our statutory and regulatory permits and approvals required to operate our business would adversely affect our operations and profitability. Our Company requires several statutory and regulatory permits, licenses and approvals to operate the business. Many of these approvals are granted for fixed periods of time and need renewal from time to time. Our Company is required to renew such permits, licenses and approvals. There can be no assurance that the relevant authorities will issue any of such permits or approvals in time or at all. Further, these permits, licenses and approvals are subject to several conditions, and our Company cannot assure that it shall be able to continuously meet such conditions or be able to prove compliance with such conditions to statutory authorities, and this may lead to cancellation, revocation or suspension of relevant permits/ licenses/ approvals. Our Company may not have obtained certain statutory and regulatory approvals, registrations and licenses such as including contract labour related registrations, government pollution control board. This could be due to our applications in process or due to lack in clarity to our Company on applicability of such registrations. However, such non-compliance may result in proceedings against our Company and the Directors and such actions may directly and immediately affect our operations. For details please refer to chapter titled Government and Other Statutory Approvals beginning on page 241 of this Draft Prospectus. 25. Compliance with, and changes in, safety, health and environmental laws and various labour, workplace and related laws and regulations impose additional costs and may increase our compliance costs and as such adversely affect our results of operations and financial condition.

22 We are subject to a broad range of safety, health and environmental laws and various labour, workplace and related laws and regulations in the jurisdictions in which we operate, which impose controls on the disposal and storage of raw materials, noise emissions, air and water discharges, on the storage, handling, discharge and disposal of chemicals, employee exposure to hazardous substances and other aspects of our operations. Compliance with, and changes in these laws may increase our compliance costs and as such adversely affect our results of operations and financial condition. Shrimp farming is subject to extensive local, state and central laws and regulations that govern the acquisition, and development of plot, including laws and regulations related to zoning, permitted land uses, proportion and use of open spaces, fire safety standards, access to water and other utilities, and water and waste disposal. In addition, we and our subcontractors are subject to laws and regulations relating to, among other things, environmental approvals in respect of the project, minimum wages, working hours, health and safety of labourers and requirements of registration for contract labour. 26. Our Company has unsecured loans which are repayable on demand. Any demand from lenders for repayment of such unsecured loans, may adversely affect our cash flows. As on December 31, 2014 our Company has unsecured loans amounting to Rs lakhs from our Directors, shareholders, etc. which are repayable on demand. Such loans are not repayable in accordance with any agreed repayment schedule and may be recalled by the relevant lenders at any time. Any such unexpected demand or accelerated repayment may have a material adverse effect on our business, cash flows and financial conditions. For further details of unsecured loans of our Company, please refer Annexure XI-Statement of Unsecured Loans of chapter titled Financial Statements as Restated beginning on page 173 under the chapter Auditors Report and Financial Information of Our Company of the Draft Prospectus. 27. Our Company has negative cash flow in the past 3 years details of which are given below; Sustained negative cash flow could impact our growth and business. Cash flow of a company is a key indicator to show the extent of cash generated from operations to meet capital expenditure, pay dividends and make new investments without raising finance from external resources. Our Company has negative cash flows from investing and financing activities in the past. Particulars Cash Flow used in Investing Activities Cash Flow from / (used in) Financing Activities March 31, 2012 March 31, 2013 March 31, 2014 (Rs in Lakhs) For the period ended December 31, 2014 (589.98) (326.73) (346.72) (518.30) (320.95) (969.97) (406.36) If we are not able to generate sufficient cash flows in future, it may adversely affect our business and financial operations. 28. Our Company requires significant amounts of working capital for a continued growth. Our inability to meet our working capital requirements may have an adverse effect on our results of operations. Our business is working capital intensive. A significant portion of our working capital is required because of high receivables turnover ratio. Summary of our working capital position is given below:- (Rs. In lakhs) For the year ended March 31, As at Particulars December , 2014 a. Inventories Page 21 of 370

23 b. Trade Receivables c. Cash and Cash Equivalents d. Short Term Loans & Advances e. Other Current Assets A. Current Assets a. Short Term Borrowings b. Trade Payables c. Other Current Liabilities d. Short Term Provisions B. Current Liabilities Working Capital (A-B) Receivables as % of total current assets Our Group Company King Marine Products Private Limited has resolved to apply for strike off under the Companies Act, Our Group Company, King Marine Products Private Limited has resolved to apply for closure/striking off the Company under the Companies Act, 1956 to the Registrar of Companies ROC, Ahmedabad, Gujarat vide Board Resolution dated However, the directors of the Company are yet to make an application to the ROC. As on 31 st March 2014, our Promoter Pradeep Navik holds 33.33% share capital in the said Group Company and the Company had a loss of Rs. 539,677/ We have in the past entered into related party transactions and may continue to do so in the future. Our Company has entered into certain transactions with our related parties including our Promoter, the Promoter Group, Group Companies, our Directors and their relatives. While we believe that all such transactions have been conducted on the arm s length basis, there can be no assurance that we could not have achieved more favourable terms had such transactions not been entered into with related parties. Furthermore, it is likely that we will enter into related party transactions in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of operation. For details on the transactions entered by us, please refer to Annexure XVII - Related Party Transactions in Section Financial Statements beginning on page 173 of this Draft Prospectus. 31. Our lenders have imposed certain restrictive conditions on us under our financing arrangements. Under our financing arrangements, we are required to obtain the prior, written lender consent for, among other matters, changes in our capital structure, formulate a scheme of amalgamation or reconstruction and entering into any other borrowing arrangement. Further, we are required to maintain certain financial ratios. There can be no assurance that we will be able to comply with these financial or other covenants or that we will be able to obtain the consents necessary to take the actions we believe are necessary to operate and grow our business. Our level of existing debt and any new debt that we incur in the future has important consequences. Any failure to comply with these requirements or other conditions or covenants under our financing agreements that is not waived by our lenders or is not otherwise cured by us, may require us to repay the borrowing in whole or part and may include other related costs. Our Company may be forced to sell some or all of its assets or limit our operations. This may adversely affect our ability to conduct our business and impair our future growth plans. For further information, see the chapter titled Financial Indebtedness on page 220 of this Draft Prospectus. Though these covenants are restrictive to some extent to us however it ensures financial discipline, which would help us in the long run to improve our financial performance. Page 22 of 370

24 32. Our Promoter and members of the Promoter Group have provided personal guarantees to certain loan facilities availed by us, which if revoked may require alternative guarantees, repayment of amounts due or termination of the facilities. Our Promoter and members of the Promoter Group have provided personal guarantees in relation to certain loan facilities availed of by us. In the event that any of these guarantees are revoked, the lenders for such facilities may require alternate guarantees, repayment of amounts outstanding under such facilities, or may even terminate such facilities. We may not be successful in procuring alternative guarantees satisfactory to the lenders, and as a result may need to repay outstanding amounts under such facilities or seek additional sources of capital, which may not be available on acceptable terms or at all and any such failure to raise additional capital could affect our operations and our financial condition. 33. Our insurance coverage may not be adequate. Our Company has obtained insurance coverage in respect of certain risks. Our significant insurance policies consist of, among others, standard fire and special perils, earthquake (fire and shock), etc. While we believe that we maintain insurance coverage in adequate amounts consistent with size of our business, our insurance policies do not cover all risks, specifically risks like product defect/liability risk, loss of profits, losses due to terrorism (except as provided in the marine cargo insurance). There can be no assurance that our insurance policies will be adequate to cover the losses in respect of which the insurance has been availed. If we suffer a significant uninsured loss or if insurance claim in respect of the subject-matter of insurance is not accepted or any insured loss suffered by us significantly exceeds our insurance coverage, our business, financial condition and results of operations may be materially and adversely affected. Further our Company has recently acquired a new property for managing water facilities with respect to the proposed processing unit. The Company is yet to take insurance for this property. For further details, please refer chapter titled Our Business beginning on page 110 of this Draft Prospectus. 34. Our success depends largely upon the services of our Directors and other Key Managerial Personnel and our ability to attract and retain them. Demand for Key Managerial Personnel in the industry is intense and our inability to attract and retain Key Managerial Personnel may affect the operations of our Company. Our Directors, Mr. Pradeep Navik, Mr. Shantilal Patel and Mr. Rohan Navik have built relations with clients and other persons who are connected with us. Our success is substantially dependent on the expertise and services of our Directors and our Key Managerial Personnel. They provide expertise which enables us to make well informed decisions in relation to our business and our future prospects. Our future performance will depend upon the continued services of these persons. Demand for Key Managerial Personnel in the aquaculture industry is intense. We cannot assure you that we will be able to retain any or all, or that our succession planning will help to replace, the key members of our management. The loss of the services of such key members of our management team and the failure of any succession plans to replace such key members could have an adverse effect on our business and the results of our operations. 35. Our Promoter and Directors may have interest in our Company, other than reimbursement of expenses incurred or remuneration. Our Promoter and Directors may be deemed to be interested to the extent of the Equity Shares held by them, or their relatives or loans advanced and personal guarantee s provided by them to/for the Company, and benefits deriving from their directorship in our Company. Also our Company has entered into collaboration agreements with many partnership firms wherein our Promoters are interested as partners. Our Promoters are interested in the transactions entered into between our Company and themselves as well as between our Company and our Group Entities. For further details, please refer to the chapters titled Our Business and Our Promoter and Promoter Group, beginning on page 110 and 155, respectively and Related Party Transactions beginning on page 171 of this Draft Prospectus. Page 23 of 370

25 36. We utilize independent contractors to provide labour, upon whom we do not have direct control, to provide labourers. We contract with independent contractors for the need of manpower of our projects. If a contractor fails to perform its obligations satisfactorily or within the prescribed time periods with regard to a project, we may be unable to culture the shrimps within the intended timeframe, at the intended cost, or at all. If this occurs, we may be required to incur additional cost or time to develop the shrimps to appropriate quality standards in a manner consistent with our development objective, which could result in reduced profits or in some cases, significant penalties and losses. We cannot assure you that the services rendered by any of our independent contractors will always be satisfactory or match our requirements for quality. 37. Labour unrest problems and shortage of skilled/unskilled labour may significantly affect our business and if our employees unionize, we may be subject to, slowdowns and increased wage costs. We believe that the aquaculture industry in India is currently experiencing a shortage of skilled/unskilled labour. As a consequence, we face competitive pressures in recruiting and retaining engineers as well as other skilled labour, professionally qualified staff and other unskilled labour as and when we need them. We believe that we currently pay salaries at market rate in order to secure an adequate number of personnel; however, we may in the future need to pay remuneration that is above market rates which could result in lower profit margins for us. Further, there can be no assurance that increased salaries will result in a lower rate of attrition. The loss of the services of our personnel or our inability to recruit or train a sufficient number of experienced personnel or our inability to manage the attrition levels in different employee categories may have an adverse effect on our financial results and business prospects. In addition, India has stringent labour legislation that protects the interests of workers, including legislation that sets forth detailed procedures for the establishment of unions, dispute resolution and employee removal and legislation that imposes certain financial obligations on employers upon retrenchment. Although our employees are not currently unionized, there can be no assurance that they will not unionize in the future. If our employees unionize, it may become difficult for us to maintain flexible labour policies, and our business may be adversely affected. 38. We could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect our financial condition, results of operations and reputation. Employee misconduct or errors could expose us to business risks or losses, including regulatory sanctions and serious harm to our reputation. There can be no assurance that we will be able to detect or deter such misconduct. Moreover, the precautions we take to prevent and detect such activity may not be effective in all cases. Our employees and agents may also commit errors that could subject us to claims and proceedings for alleged negligence, as well as regulatory actions on account of which our business, financial condition, results of operations and goodwill could be adversely affected. 39. Our Promoters and members of the Promoter Group will continue jointly to retain majority control over our Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval. Post this Issue, our Promoters and Promoter Group will collectively own 68.42% of our equity share capital. As a result, our Promoters, together with the members of the Promoter Group, will continue to exercise a significant degree of influence over Company and will be able to control the outcome of any proposal that can be approved by a majority shareholder vote, including, the election of members to our Board, in accordance with the Companies Act, 2013 and our Articles of Association. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of our Company. In addition, our Promoters will continue to have the ability to cause us to take actions that are not in, or may conflict with, our interests or the interests of some or all of our creditors or other shareholders, and we cannot assure you that such actions will not have an adverse effect on our future financial performance or the price of our Equity Shares. Page 24 of 370

26 40. Our future funds requirements, in the form of fresh issue of capital or securities and/or loans taken by us, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised. We may require additional capital from time to time depending on our business needs. Any fresh issue of shares or convertible securities would dilute the shareholding of the existing shareholders and such issuance may be done on terms and conditions, which may not be favorable to the then existing shareholders. If such funds are raised in the form of loans or debt, then it may substantially increase our interest burden and decrease our cash flows, thus prejudicially affecting our profitability and ability to pay dividends to our shareholders. 41. Our ability to pay dividends will depend upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and other factors. The amount of our future dividend payments, if any, will depend upon various factors such as our future earnings, financial condition, cash flows, working capital requirements, capital expenditures and other factors. There can be no assurance that we shall have distributable funds or that we will declare dividends in the future. Additionally, the terms of any financing we obtain in the future, may contain restrictive covenants which may also affect some of the rights of our shareholders, including the payment of the dividend. 42. Delay in raising funds from the IPO could adversely impact the implementation schedule and affect our ability to execute the expansion project within the given time frame, thus impeding our growth plans and profitability The expansion of our proposed project is to be funded from the proceeds of the IPO and internal accruals. We have not identified any alternate source of funding and hence any failure or delay on our part to mobilize the required resources or any shortfall in the Net Proceeds may delay the implementation schedule. We therefore, cannot assure that we would be able to execute the expansion project within the given time frame, or within the costs as originally estimated by us. Any time overrun or cost overrun may adversely affect our growth plans and profitability. 43. Within the parameters as mentioned in the chapter titled Objects of this Issue beginning on page 76 of this Draft Prospectus, our Company s management will have flexibility in applying the proceeds of this Issue. The fund requirement and deployment mentioned in the Objects of this Issue have not been appraised by any bank or financial institution. We intend to use entire fresh Issue Proceeds towards working capital needs, general corporate purposes and to meet the issue expenses. We intend to deploy the Net Issue Proceeds in financial year and such deployment is based on certain assumptions and strategy which our Company believes to implement in future. The funds raised from the fresh Issue may remain idle on account of change in assumptions, market conditions, strategy of our Company, etc., For further details on the use of the Issue Proceeds, please refer chapter titled "Objects of the Issue" beginning on page 76 of this Draft Prospectus. The deployment of funds for the purposes described above is at the discretion of our Company s Board of Directors. The fund requirement and deployment is based on internal management estimates and has not been appraised by any bank or financial institution. Accordingly, within the parameters as mentioned in the chapter titled Objects of the Issue beginning on page 76 of this Draft Prospectus, the Management will have significant flexibility in applying the proceeds received by our Company from the Issue. Our Board of Directors will monitor the utilisation of the proceeds of this Issue. Page 25 of 370

27 ISSUE SPECIFIC RISK Page 26 of 370 Zeal Aqua Limited Draft Prospectus 44. We have issued Equity Shares in the last twelve months, the price of which is lower than the Issue Price. Our Company has issued 11,50,200 Bonus Equity Shares in the last twelve months. For further details of Equity Shares issued, please refer to chapter titled, Capital Structure beginning on page 56 of this Draft Prospectus. 45. Sale of Equity Shares by our Promoter or other significant shareholder(s) may adversely affect the trading price of the Equity Shares. Any instance of disinvestments of equity shares by our Promoter or by other significant shareholder(s) may significantly affect the trading price of our Equity Shares. Further, our market price may also be adversely affected even if there is a perception or belief that such sales of Equity Shares might occur. 46. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholder s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time. Once listed, we would be subject to circuit breakers imposed by all stock exchanges in India, which does not allow transactions beyond specified increases or decreases in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by SEBI on Indian stock exchanges. The percentage limit on circuit breakers is set by the stock exchanges based on the historical volatility in the price and trading volume of the Equity Shares. The stock exchanges do not inform us of the percentage limit of the circuit breaker in effect from time to time, and may change it without our knowledge. This circuit breaker limits the upward and downward movements in the price of the Equity Shares. As a result of this circuit breaker, no assurance may be given regarding your ability to sell your Equity Shares or the price at which you may be able to sell your Equity Shares at any particular time. 47. After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop. The price of the Equity Shares on the Stock Exchanges may fluctuate as a result of the factors, including: a. Volatility in the Indian and global capital market; b. Company s results of operations and financial performance; c. Performance of Company s competitors; d. Adverse media reports on the Company or pertaining to the aquaculture industry; e. Changes in our estimates of performance or recommendations by financial analysts; f. Significant developments in India s economic and fiscal policies; Current valuations may not be sustainable in the future and may also not be reflective of future valuations for our industry and our Company. There has been no public market for the Equity Shares and the prices of the Equity Shares may fluctuate after this Issue. There can be no assurance that an active trading market for the Equity Shares will develop or be sustained after this Issue or that the price at which the Equity Shares are initially traded will correspond to the price at which the Equity Shares will trade in the market subsequent to this Issue. 48. The Issue price of our Equity Shares may not be indicative of the market price of our Equity Shares after the Issue and the market price of our Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price. The Issue Price of our Equity Shares is based on numerous factors (For further information, please refer chapter titled Basis for Issue Price beginning on page 82 of this Draft Prospectus) and may not be indicative of the market price of our Equity Shares after the Issue. The market price of our Equity Shares could be subject to significant fluctuations after the Issue, and may decline below the

28 Issue Price. We cannot assure you that you will be able to sell your Equity Shares at or above the Issue Price. Among the factors that could affect our share price include without limitation, the following: Half yearly variations in the rate of growth of our financial indicators, such as earnings per share, net income and revenues; Changes in revenue or earnings estimates or publication of research reports by analysts; Speculation in the press or investment community; General market conditions; and Domestic and international economic, legal and regulatory factors unrelated to our performance. 49. You will not be able to sell immediately on Indian Stock Exchanges any of the Equity Shares you purchase in the Issue until the Issue receives appropriate trading permissions. The Equity Shares will be listed on the Stock Exchange. Pursuant to Indian regulations, certain actions must be completed before the Equity Shares can be listed and trading may commence. We cannot assure you that the Equity Shares will be credited to investor s demat accounts, or that trading in the Equity Shares will commence, within the time periods specified in this Draft Prospectus. Any failure or delay in obtaining the approval would restrict your ability to dispose of the Equity Shares. In accordance with section 40 of the New Companies Act, in the event that the permission of listing the Equity Shares is denied by the stock exchanges, we are required to refund all monies collected to investors EXTERNAL RISK FACTORS 50. The Aquaculture industry is subject to significant regulations. The aquaculture industry is subject to extensive laws and regulations imposed by government authorities including the Ministry of Environment, the State Pollution Control Boards, environmental laws and regulations relating to Air and Water Control, Waste Disposal etc. Possible future developments, including the promulgation of more stringent environmental laws and regulations and timing of the future enforcement proceedings that may be taken by environment authorities could affect the costs and the manner in which the Company conducts its business and could also result in substantial capital expenditure. In addition, the Company s licenses and permits are subject to renewal. While the Company anticipates that renewals will be given as and when sought, there is no assurance that such renewals will be given as a matter of course and there is no assurance that new conditions will not be imposed in connection therewith. Environmental laws and regulations require the Company to incur certain costs, which could be substantial, to operate existing facilities, construct and operate new facilities, and mitigate or remove the effect of past operations on the environment. Governmental regulations establishing environmental protection standards are continually evolving, and, therefore, the character, scope, cost and availability of the measures that may be required to be taken to ensure compliance with evolving laws or regulations cannot be predicted. To the extent that environmental liabilities are greater than the Company s insurance coverage and the Company is unsuccessful in recovering anticipated insurance proceeds under the relevant policies, the results of operations and financial condition could be materially and adversely affected. 51. Political, economic or other factors that are beyond our control may have an adverse effect on our business and results of operations. The following external risks may have an adverse impact on our business and results of operations should any of them materialize: Page 27 of 370

29 Page 28 of 370 Zeal Aqua Limited Draft Prospectus A change in the central or Gujarat state government or a change in the economic and deregulation policies could adversely affect economic conditions prevalent in the areas in which we operate in general and our business in particular; High rates of inflation in India could increase our costs without proportionately increasing our revenues, and as such decrease our operating margins; and A slowdown in economic growth or financial instability in India could adversely affect our business and results of operations. Civil unrest, acts of violence, terrorists attacks, regional conflicts or situations or war involving India or other countries could materially and adversely affect the financial markets which could impact our business. Such incidents could impact economic growth or create a perception that investment in Indian companies could involve higher degree in risk which could reduce the value of the equity shares. National disasters in India may disrupt or adversely affect the Indian economy which in turn may affect the health of our business Any downgrading of Indian Sovereignty rating by international credit rating agencies may negatively impact our business and access to capital 52. The Companies Act, 2013 has effected significant changes to the existing Indian company law framework, which may subject us to higher compliance requirements and increase our compliance costs. A majority of the provisions and rules under the Companies Act, 2013 have recently been notified and have come into effect from the date of their respective notification, resulting in the corresponding provisions of the Companies Act, 1956 ceasing to have effect. The Companies Act, 2013 has brought into effect significant changes to the Indian company law framework, such as in the provisions related to issue of capital, disclosures in Draft Prospectus, corporate governance norms, audit matters, related party transactions, introduction of a provision allowing the initiation of class action suits in India against companies by shareholders or depositors, a restriction on investment by an Indian company through more than two layers of subsidiary investment companies (subject to certain permitted exceptions), prohibitions on loans to directors and insider trading and restrictions on directors and key managerial personnel from engaging in forward dealing. To ensure compliance with the requirements of the Companies Act, 2013, we may need to allocate additional resources, which may increase our regulatory compliance costs and divert management attention. The Companies Act, 2013 introduced certain additional requirements which do not have corresponding equivalents under the Companies Act, Accordingly, we may face challenges in interpreting and complying with such provisions due to limited jurisprudence on them. In the event, our interpretation of such provisions of the Companies Act, 2013 differs from, or contradicts with, any judicial pronouncements or clarifications issued by the Government in the future, we may face regulatory actions or we may be required to undertake remedial steps. We may face difficulties in complying with any such overlapping requirements. Further, we cannot currently determine the impact of provisions of the Companies Act, 2013 which are yet to come in force. Any increase in our compliance requirements or in our compliance costs may have an adverse effect on our business and results of operations. 53. Significant differences exist between Indian GAAP and other accounting principles, such as U.S. GAAP and IFRS, which may be material to the financial statements prepared and presented in accordance with SEBI ICDR Regulations contained in this Draft Prospectus. The Financial Statements beginning from page 173 included in this Draft Prospectus are based on the audited financial statements that are prepared and presented in conformity with Indian GAAP and restated in accordance with the SEBI ICDR Regulations, and no attempt has been made to reconcile any of the information given in this Draft Prospectus to any other principles or to base it on any other standards. Indian GAAP differs from accounting principles and auditing standards with which prospective investors may be familiar in other countries, such as U.S. GAAP and IFRS. Significant differences exist between Indian GAAP and U.S. GAAP and IFRS, which may be material to the

30 financial information prepared and presented in accordance with Indian GAAP contained in this Draft Prospectus. Accordingly, the degree to which the financial information included in this Draft Prospectus will provide meaningful information is dependent on familiarity with Indian GAAP, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian GAAP on the financial disclosures presented in this Draft Prospectus should accordingly be limited. 54. The nationalized goods and services tax ( GST) regimes proposed by the Government of India may have material impact on our operations The Government of India has propose a comprehensive national goods and service tax (GST) regime that will combine taxes and levies by the Central and State Governments into a unified rate structure. Given the limited liability of information in the public domain covering the GST we are unable to provide/ measure the impact this tax regime may have on our operations. 55. You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares. Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an Indian company are generally taxable in India. Any gain realised on the sale of shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if the securities transaction tax ( STT ) has been paid on the transaction. The STT will be levied on and collected by an Indian stock exchange on which equity shares are sold. Any gain realised on the sale of shares held for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and as a result of which no STT has been paid, will be subject to long term capital gains tax in India. Further, any gain realised on the sale of shares held for a period of 12 months or less will be subject to capital gains tax in India. Further, any gain realised on the sale of listed equity shares held for a period of 12 months or less which are sold other than on a recognised stock exchange and on which no STT has been paid, will be subject to short term capital gains tax at a relatively higher rate as compared to the transaction where STT has been paid in India. 56. We cannot guarantee the accuracy or completeness of facts and other statistics with respect to India, the Indian economy and the aquaculture sector contained in the Draft Prospectus. While facts and other statistics in the Draft Prospectus relating to India, the Indian economy and the aquaculture sector has been based on various government publications and reports from government agencies that we believe are reliable, we cannot guarantee the quality or reliability of such materials. While we have taken reasonable care in the reproduction of such information, industry facts and other statistics have not been prepared or independently verified by us or any of our respective affiliates or advisors and, therefore we make no representation as to their accuracy or completeness. These facts and other statistics include the facts and statistics included in the chapter titled Our Industry beginning on page 93 of the Draft Prospectus. Due to possibly flawed or ineffective data collection methods or discrepancies between published information and market practice and other problems, the statistics herein may be inaccurate or may not be comparable to statistics produced elsewhere and should not be unduly relied upon. Further, there is no assurance that they are stated or compiled on the same basis or with the same degree of accuracy, as the case may be, elsewhere. 57. Conditions in the Indian securities market may affect the price or liquidity of our Equity Shares. The Indian securities markets are smaller than securities markets in more developed economies and the regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participants differ, in some cases significantly, from those in the more developed economies. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. Further, the Indian stock exchanges have experienced volatility in the recent times. The Indian stock exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading and limited price movements. A closure of, or trading stoppage on the BSE could adversely affect the trading price of the Equity Shares. Page 29 of 370

31 58. There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the SME Platform of BSE in a timely manner, or at all. In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant to the Issue will not be granted until after the Equity Shares have been issued and allotted. Approval for listing and trading will require all relevant documents authorizing the issuing of Equity Shares to be submitted. There could be a failure or delay in listing the Equity Shares on the SME Platform of BSE. Any failure or delay in obtaining the approval would restrict your ability to dispose of your Equity Shares. 59. Natural calamities could have a negative impact on the Indian economy and cause Our Company's business to suffer. India has experienced natural calamities such as earthquakes, tsunami, floods etc. in recent years. The extent and severity of these natural disasters determine their impact on the Indian economy. Prolonged spells of abnormal rainfall or other natural calamities could have a negative impact on the Indian economy, which could adversely affect our business, prospects, financial condition and results of operation as well as the price of the Equity Shares. 60. Terrorist attacks, civil unrests and other acts of violence or war involving India or other countries could adversely affect the financial markets, our business, financial condition and the price of our Equity Shares. Any major hostilities involving India or other acts of violence, including civil unrest or similar events that are beyond our control, could have a material adverse effect on India s economy and our business. Incidents such as the terrorist attacks, other incidents such as those in US, Indonesia, Madrid and London, and other acts of violence may adversely affect the Indian stock markets where our Equity Shares will trade as well the global equity markets generally. Such acts could negatively impact business sentiment as well as trade between countries, which could adversely affect our Company s business and profitability. Additionally, such events could have a material adverse effect on the market for securities of Indian companies, including the Equity Shares. 61. Any downgrading of India s sovereign rating by an independent agency may harm our ability to raise financing. Any adverse revisions to India's credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing may be available. This could have an adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of our Equity Shares. 62. Financial instability in Indian financial markets could adversely affect our Company s results of operations and financial condition. In this globalized world, the Indian economy and financial markets are significantly influenced by worldwide economic, financial and market conditions. Any financial turmoil, say in the United States of America, Europe, China or other emerging economies, may have a negative impact on the Indian economy. Although economic conditions differ in each country, investors reactions to any significant developments in one country can have adverse effects on the financial and market conditions in other countries. A loss in investor confidence in the financial systems, particularly in other emerging markets, may cause increased volatility in Indian financial markets. Indian financial markets have also experienced the contagion effect of the global financial turmoil. Any prolonged financial crisis may have an adverse impact on the Indian economy, thereby resulting in a material and adverse effect on our Company's business, operations, and financial condition Page 30 of 370

32 SECTION III INTRODUCTION SUMMARY OF OUR INDUSTRY Zeal Aqua Limited Draft Prospectus The information in this section includes extracts from publicly available information, data and statistics and has been derived from various government publications. Neither we nor any other person connected with the Issue have verified this information. The data may have been re-classified by us for the purposes of presentation. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be based on such information. You should read the entire Draft Prospectus, including the information contained in the sections titled Risk Factors and Financial Statements and related notes beginning on page 13 and 173 respectively of this Draft Prospectus before deciding to invest in our Equity Shares. GLOBAL AQUACULTURE INDUSTRY Global fish production has grown steadily in the last five decades, with food fish supply increasing at an average annual rate of 3.2 percent, outpacing world population growth at 1.6 percent. World per capita apparent fish consumption increased from an average of 9.9 kg in the 1960s to 19.2 kg in This impressive development has been driven by a combination of population growth, rising incomes and urbanization, and facilitated by the strong expansion of Aquaculture production and more efficient distribution channels. China has been responsible for most of the growth in fish availability, owing to the dramatic expansion in its fish production, particularly from aquaculture. Its per capita apparent fish consumption also increased an average annual rate of 6.0 percent in the period to about 35.1 kg in Annual per capita fish supply in the rest of the world was about 15.4 kg in 2010 (11.4 kg in the 1960s and 13.5 kg in the 1990s).Despite the surge in annual per capita apparent fish consumption in developing regions (from 5.2 kg in 1961 to 17.8 kg in 2010) and low-income food-deficit countries (LIFDCs) (from 4.9 to 10.9 kg), developed regions still have higher levels of consumption, although the gap is narrowing. A sizeable and growing share of fish consumed in developed countries consists of imports, owing to steady demand and declining domestic fishery production. In developing countries, fish consumption tends to be based on locally and seasonally available products, with supply driving the fish chain. However, fuelled by rising domestic income and wealth, consumers in emerging economies are experiencing a diversification of the types of fish available owing to an increase in fishery imports. Source: Food and Agriculture Organization of the United Nations- World capture fisheries and aquaculture production Source: Food and Agriculture Organization of the United Nations- Page 31 of 370

33 World food fish aquaculture production expanded at an average annual rate of 6.2 percent in the period (9.5 percent in ) from 32.4 million to 66.6 million tonnes. In the same period, growth was relatively faster in Africa (11.7 percent) and Latin America and the Caribbean (10 percent). Excluding China, production in the rest of Asia grew by 8.2 percent per year (4.8 percent in ). The annual growth rate in China, the largest aquaculture producer, averaged 5.5 percent in (12.7 percent in ). In 2012, production in North America was lower than in Global aquaculture production attained another all-time high of 90.4 million tonnes (live weight equivalent) in 2012 (US$144.4 billion), including 66.6 million tonnes of food fish and 23.8 million tonnes of aquatic algae, with estimates for 2013 of 70.5 million and 26.1 million tonnes, respectively. China alone produced 43.5 million tonnes of food fish and 13.5 million tonnes of aquatic algae that year. Some developed countries, e.g. the United States of America, have reduced their aquaculture output in recent years, mainly owing to competition from countries with lower production costs.an important change in trade patterns is the increased share of developing countries in fishery trade. Developing economies saw their share rise to 54 percent of total fishery exports by value in 2012, and more than 60 percent by quantity (live weight). Although developed countries continue to dominate world imports of fish and fishery products, their share has decreased. Exports from developing countries have increased significantly in recent decades also thanks to the lowering of tariffs. This trend follows the expanding membership of the World Trade Organization (WTO), the entry into force of bilateral and multilateral trade agreements, and rising disposable incomes in emerging economies. However, several factors continue to constrain developing countries in accessing international markets INDIAN AQUACULTURE INDUSTRY Vannamei prawns Tiger Shrimp Indian banana prawn Aquaculture in India is a very important economic activity and a flourishing sector with varied resources and potentials. Only after the Indian Independence, has fisheries together with agriculture been recognized as an important sector. The vibrancy of the sector can be visualized by the 11 fold increase that India achieved in fish production in just six decades, i.e. from 0.75 million tonnes in to 9.6 million tonnes during This resulted in an unparalleled average annual growth rate of over 4.5 percent over the years which have placed the country on the forefront of global fish production, only after China. As the second largest country in aquaculture production, the share of inland fisheries and aquaculture has gone up from 46 percent in the 1980s to over 85 percent in recent years in total fish production. Freshwater aquaculture showed an overwhelming ten-fold growth from 0.37 million tonnes in 1980 to 4.03 million tonnes in 2010; with a mean annual growth rate of over 6 percent. Freshwater aquaculture contributes to over 95 percent of the total aquaculture production. The Freshwater aquaculture comprises of the culture of carp fishes, culture of catfishes (air breathing and non-air breathing), culture of freshwater prawns, culture of pangasius, and culture of tilapia. In addition, in brackishwater sector, the aquaculture includes culture of shrimp varieties mainly, the native giant tiger prawn (Penaeus monodon) and exotic white leg shrimp (Penaeus vannamei). Thus, the production of carp in freshwater and shrimps in brackish water form the bulk of major areas of aquaculture activity. The three Indian major carps, namely catla (Catla catla), rohu (Labeo rohita) and mrigal (Cirrhinus mrigala) contribute the bulk of production to the extent of 70 to 75 percent of the total fresh water fish production, followed by silver carp, grass carp, common carp, catfishes forming a second Page 32 of 370

34 important group contributing the balance of 25 to 30 percent. It is estimated that only about 40 percent of the available area of 2.36 million hectares of ponds and tanks has been put to use and an immense scope for expansion of area exists under freshwater aquaculture The national mean production levels from stillwater ponds has gone up from about 600 kg/hectare/year in 1974 to over kg/hectare/annum at present and several farmers are even demonstrating higher production levels of 8 12 tonnes/hectare/year. The technologies of induced carp breeding and polyculture in static ponds and tanks virtually revolutionized the freshwater aquaculture sector and turned the sector into a fast growing commercial sector. The developmental support provided by the Indian Government through a network of Fish Farmers' Development Agencies and Brackishwater Fish Farmers' Development Agencies and the research and development programmes of the Indian Council of Agricultural Research (ICAR) have been the principal vehicles for this revolutionary development. In addition, additional support was also provided by various state governments, host of organizations and agencies like the Marine Products Export Development Authority, financial institutions, etc. The freshwater prawn farming has received increased attention only in the last two decades due to its high consumer demand. The giant river prawn, Macrobrachium rosenbergii, the largest and fastest growing prawn species, is cultured either under monoculture or polyculture with major carps. Culture for mariculture species has been initiated in the country and is presently carried out to a limited extent for seaweeds, and mussels as a commercial activity and some fish species like seabass and cobia on an experimental basis to standardize the technology. While sustainability is being addressed, the present concern is with regard to species diversification, in spite of the fact that the country possesses several other endemic potential and cultivable medium and minor carp species having regional demand, such as, Labeo calbasu, L. fimbriatus, L.gonius, L.dussumieri, L.bata, Cirrihinus cirrhosa, C.reba, Puntius sarana, P.jerdoni. Efforts are being made to standardize the technology of mass-scale seed production of these species and their inclusion as a component of conventional carp polyculture, based on their regional importance. In addition, there is contribution from cold water fisheries, although insufficient for fish basket, is of high value and low volume category with a projected volume of 1 percent. Important food fishes of cold waters are mahaseer and schizothoracids belonging to the indigenous species and trouts among the exotic varieties. India's aquaculture production basically can be classified into freshwater and brackish water production. There are 429 Fish Farmers Development Agencies (FFDA) and 39 brackish water Fish Farmers Development Agencies (BFDAs) for promoting freshwater and coastal aquaculture. The freshwater prawn farming has received increased attention only in the last two decades due to its high consumer demand. The giant river prawn, Macrobrachium rosenbergii, the largest and fastest growing prawn species, is cultured either under monoculture or polyculture with major carps. Culture for mariculture species has been initiated in the country and is presently carried out to a limited extent for seaweeds, and mussels as a commercial activity and some fish species like seabass and cobia on an experimental basis to standardize the technology. Freshwater Aquaculture Brakish Water Aquaculture Indian Aquuculture Industry Page 33 of 370

35 Aquaculture in India has evolved as a viable commercial farming practice from the level of traditionally backyard activity over last three decades with considerable diversification in terms of species and systems, and has been showing an impressive annual growth rate of 6-7 percent. While the carp-based freshwater aquaculture, mainly constituted by the Indian major carps, such as, catla, rohu and mrigal, has been contributing over 90 percent of the aquaculture production satisfying the domestic need, the shrimpbased coastal aquaculture contributes to only about 5 percent of the export earnings. Aquaculture in India has become an important sector that includes carps, catfishes and prawns. Lately, the Government of India has also identified catfish farming as a national priority and has emphasized on diversification of culture practices. The importance and role of shrimp farming in India s economy was realized in the early seventies, and the first Experimental Brackish water Fish Farm began in Kakdwip, West Bengal, by the Central Inland Fisheries Research Institute under the Indian Council of Agricultural Research (ICAR) in This was followed by an All-India Coordinated Research Project on Brackish water Fish Farming was started in 1975 by the ICAR with centres in West Bengal, Odisha, Andhra Pradesh, Tamilnadu, Kerala and Goa. Later, a number of development schemes were initiated by the Ministry of Agriculture of the Government of India; including setting up of Brackish water Fish Farmers Development Agencies (BFDA) in the maritime states for the development of shrimp farming. This paved way for the establishment of a number of shrimp hatcheries and farms in the coastal states in the early nineties. India witnessed a phenomenal increase in the area under shrimp farming which occurred between , and the growth rate was phenomenal till In fact, farmed shrimp production recorded over five-fold increase from 28,000 tonnes in to 1,44,346 tonnes in and operating at around 1,00,000 tonnes over the years. More than 90 percent of the shrimp farmers in India are small land holders owning less than 2 hectares. Freshwater aquaculture Freshwater aquaculture is based on. carp culture.it revolves around the 'polyculture' of the three Indian major carps (catla, roho labeo and mrigal carp), as well as 'composite carp culture' of the three Indian major carps with the three exotic carps (silver, grass and common carp). Standard practices in carp culture include: The stocking of carp at combined densities varies depending on the system of culture Pond fertilization with organic manures from cattle or poultry, as well as inorganic fertilizers like urea and single super phosphate. Provision of supplementary feeds mainly in the form of a mixture of rice bran/wheat bran and groundnut/mustard oilcake in equal ratio. Source: Food and Agriculture Organization of the United Nations There are more than 100 species of Freshwater prawn found in the world. There are more than 25 species found in India. Out of these 10 species are important from commercial point of view. Out of them Macrobrachium rosenbengii is the main species which is used in culture practices. This is also known as giant prawn. This can be cultured in both fresh water as well as brackish water. It is fast growing animal and farmers can culture profitably. It contains percent animal protein and has less cholesterol. It has essential amino-acids and mineral which are very important for human beings. In culture practices, the freshwater prawn has two stages i.e. Nursery Pond and Growout Pond. Fresh water prawn is stocked in nursery pond for days then it is shifted to grow-out ponds. The ponds are prepared by using manure and fertilizers. The stocking density in nursery pond is kept lakh per hectare. Feed is provided gm per kg body weight at initial stage. Check trays are used to regulate the feeding. Prawn crop becomes ready for sale with 7-8 months. The expenditure about Rs lakh per hectare and income is Rs lakh. Thus net income is Rs lakh per hectare in 8 months. Source:-Fisheries Department Haryana Page 34 of 370

36 Level-1: EXTENSIVE FRESHWATER PRAWN CULTURE Extensive culture means rearing in ponds (but also in other impoundments such as reservoirs, irrigation ponds and rice fields) which produce less than 500 kg/ha/yr of freshwater prawns. They are stocked, often from wild sources, with PL or juveniles at 1-4/m2. There is no control of water quality; the growth or mortality of the prawns is not normally monitored; supplemental feeding is not normally supplied; and organic fertilisation is rarely applied. Level-2: SEMI-INTENSIVE FRESHWATER CULTURE PRAWN Semi-intensive systems involve stocking PL or juvenile freshwater prawns (usually from hatcheries) at 4-20/m2 in ponds, and result in a range of productivity of more than 500 kg/ha/yr and less than that defined as intensive in this box. Fertilisation is used and a balanced feed ration is supplied. Predators and competitors are controlled and water quality, prawn health and growth rate are monitored. This form of culture is the most common in tropical areas. Zeal Aqua Limited Draft Prospectus Level-3: INTENSIVE FRESHWATER PRAWN CULTURE Intensive culture refers to freshwater prawn farming in small earth or concrete ponds (up to 0.2 ha) provided with high water exchange and continuous aeration, stocked at more than 20/m2 and achieving an output of more than kg/ha/yr. Construction and maintenance costs are high and a high degree of management is required, which includes the use of a nutritionally complete feed, the elimination of predators and competitors, and strict control over all aspects of water quality.. Brackish water aquaculture Brackish water aquaculture in India is restricted to shrimp farming utilizing semi-intensive culture practices mainly with giant tiger prawn at stocking densities of million/ha. With the provision of a high protein diet, water exchange, aeration and improved health management, production levels of 4 6 tonnes/ha have been demonstrated in a production period of 4 5 months. However, the presence of white spot syndrome during drastically reduced prawn farming activity in the late 1990s. The adoption of a more cautious approach including moderate stocking densities and good management practices has helped in the revival of the sector and in sustaining shrimp production of the country. Furthermore, with the recent introduction of Penaeus vannamei, the shrimp culture is again regaining its glory of export earner at large. The brackish water aquaculture sector is mainly supported by shrimp production, as well as, the giant tiger prawn (Penaeus monodon), which is responsible for the bulk of production followed by the recently introduced whiteleg shrimp, Penaeus vannamei. In fact, the culture of this shrimp picked up on par with tiger shrimp in very short span of time. Although India possesses several other potential species of finfish and shellfish, the production of these, is still very low key. Page 35 of 370

37 State-wise details of Tiger shrimp production Sr. No. States Area (ha) Zeal Aqua Limited Draft Prospectus Total Total Production Productivity Area Production Productivity (MT) MT/ha/yr (ha) (MT) (MT/ha/yr) 1 West Bengal 48,558 45, ,410 52, Orissa 8,597 10, ,256 14, Andhra Pradesh 35,274 51, ,925 25, Tamil Nadu 5,360 12, ,293 17, Kerala 12,809 8, ,917 5, Karnataka Goa Maharashtra 1,098 1, ,047 2, Gujarat 1,971 4, ,992 6, Total 1,14,370 1,35, ,110 1,23, Source: MPEDA, Kochi - Production from Aquaculture farms Page 36 of 370

38 Overview SUMMARY OF OUR BUSINESS Zeal Aqua Limited Draft Prospectus Incorporated in 2009, our Company is pioneer in aquaculture industry in the state of Gujarat. Our Company is engaged in farming of shrimps viz. white shrimps and tiger shrimps which has an enormous demand worldwide for human consumption. In addition to shrimp farming, our Company also deals in products used in aquaculture of shrimps such as shrimp seeds, feeds, probiotics and others. Driven by rich experience of more than 20 years in aquaculture, innovation and investment in R&D, our Promoters strategized to capitalize on the growing global demand of shrimps and instituted our Company under the name Zeal Aqua Private Limited in March 2009 with a vision to develop an advanced, sustained and fully integrated aquaculture system across India. Subsequently in March 2015, our Company was converted into a public limited company and its name was changed to Zeal Aqua Limited. The revolution of aquaculture industry gained momentum, with the realization of the government to make commercial use of coastal lands which could not be used for agricultural purposes. The introduction of schemes of Government to allot coastal lands for aquaculture purposes to promote this industry and generate a source of revenue for farmers motivated our Promoters to enter this industry. Our Promoters who were individually culturing shrimps joined hands in 2009 to form our Company to make the business scalable and reap the benefits of synergy. At present, our Company has 81 ponds spread over around 102 hectares of land, wherein the land is being used by our Company in accordance with collaboration agreements entered with various parties. The said collaboration agreements ensure continuity of land availability on which our Company constructs ponds. In addition to shrimp farming on own ponds, our Company is also engaged in satellite farming whereby our Company supplies inputs on credit to small farmers and buys shrimps from these farmers. We deploy our specific quality control measures and the farmers under satellite farming are required to adhere to our farming standards. The satellite farming enables companies to scale up and multiply its production without putting up physical infrastructure on its own. This flexible model of shrimp production helps our Company to efficiently manage growing demand of shrimps. Our growing operations are witnessed by our sales turnover which has scaled multifold over the years. Our Company now intends to make a forward integration and is in the process of setting up a cold storage unit with processing facilities. This shall open our avenues to international markets. This is one of our major step in developing an integrated aquaculture system. Our Company not only believes in growing in numbers, but it believes in growing technologically and in an eco-friendly manner. With the objective of enhancing productivity, quality and minimize environmental degradation our Company has taken various measures such as introduction of PE Line Ponds, use of qualitative feeds, bio-security measures such as fencing and water management among others. Our state of art infrastructure and farming practices have been recognized and has fetched us the following recognitions: CIFE award in year Bhumi Nirman Award in 2011 Fisheries excellence award by Doordarshan Best Farmers for L.Vannemai by MPEDA in 2013 We believe in qualitative production with an eco-friendly approach and have thereby developed a longcontinuing relationship with our customers. With the experience of our Promoters, technological drive, continuous research, supplier tie-ups, customer relationships, government support and industry demand for shrimps and a forward integration in pipeline, our Company aims to become largest shrimp house in India and capture global markets as well. Page 37 of 370

39 OUR PRODUCTS Our Product basket mainly consists of: Shrimps Shrimp Seeds Shrimp Feeds Probiotics & others Detailed description of the products: Our Company deals in: TIGER SHRIMPS (PENAEUS MONODON) Penaeus monodon are generally dark coloured, with the carapace and abdomen transversely banded with black and white The rest of the body is variable, ranging from light brown to blue or red, while some smaller specimens show a dull red dorsal strip from the rostrum to the sixth abdominal segment. Our Company has been amongst the first producers to achieve a 20 shrimp count production, year after year in the state of Gujarat. Page 38 of 370

40 WHITE SHRIMP (L. VANNAMEI) Zeal Aqua Limited Draft Prospectus Whiteleg shrimp (Litopenaeus vannamei), also known as Pacific white shrimp, is a variety of prawn commonly caught or farmed for food. Litopenaeus vannamei grows to a maximum length of 230 millimetres (9.1 in), with a carapace length of 90 mm (3.5 in). Our Company was the one of the first to Introduce L. Vannamei Culture in Gujarat, and has been among the first to achieve a 23 Count Shrimp Production. SHRIMP SEEDS, FEEDS, PROBIOTICS & OTHERS Our Company also deals in shrimp feeds, shrimp seeds, probiotics and other aquaculture related products. Page 39 of 370

41 OUR BUSINESS PROCESS Page 40 of 370

42 OUR COMPETITIVE STRENGTH Page 41 of 370

43 SUMMARY OF FINANCIAL STATEMENTS Zeal Aqua Limited Draft Prospectus The following summary of financial data has been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the Auditor s Report in the section titled Financial Statements. You should read this financial data in conjunction with our financial statements for Financial Year 2010, 2011, 2012, 2013 and 2014 and period ended December 31, 2014 including the notes thereto and the reports thereon, which appears under the section titled Financial Statements and chapter titled Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 173 and 204 of this Draft Prospectus. STATEMENT OF ASSETS AND LIABILITIES AS RESTATED Sr. No. 1) 2) 3) 4) (Rs. in Lakhs) Particulars As at March 31, As at December , 2014 Equity & Liabilities Shareholders funds a. Share capital b. Reserves & surplus c. Share Application Money Non-current liabilities a. Long term borrowings b.long term Provisions c. Deferred tax liabilities (net) Current liabilities a. Trade payables b. Other current liabilities c. Short term provisions d.short Term Borrowings T O T A L (1+2+3) Non-current assets a. Fixed assets i. Tangible assets ii. Intangible assets iii.capital work in progress Page 42 of 370

44 Sr. No. Particulars As at March 31, Zeal Aqua Limited Draft Prospectus As at December 31, 2014 b.non-current investment c. Deferred tax assets (net) d. Long term loans & advances e. Other noncurrent assets ) Current assets a. Inventories b. Trade receivables c. Cash and cash equivalents d. Short term loans & advances e. Other current assets T O T A L (4+5) Page 43 of 370

45 STATEMENT OF PROFIT AND LOSS AS RESTATED Zeal Aqua Limited Draft Prospectus (Rs. in Lakhs) Particulars As at March 31, As at December , 2014 INCOME Revenue from Operations Other income Total revenue (A) EXPENDITURE Purchase of stockin-trade Changes in inventories of finished goods, (46.40) (21.55) 7.70 (6.85) (19.19) traded goods and work-in-progress Employee benefit expenses Finance costs Depreciation and amortization expense Other expenses Total expenses (B) Profit before tax (A-B) Prior period items (net) Profit before exceptional, extraordinary items and tax Exceptional items Profit before extraordinary items and tax Extraordinary items Profit before tax Tax expense: (i) Current tax (ii) Deferred tax (asset)/liability Total tax expense Profit for the year/ period Earning per equity share(face value of Rs. 10/- each):basic and diluted (Rs.) Page 44 of 370

46 Particulars Adjusted earning per equity share(face value of Rs. 10/- each): Basic and diluted (Rs.) As at March 31, As at December 31, Page 45 of 370

47 STATEMENT OF CASH FLOW AS RESTATED Particulars Cash flow from operating activities: Net profit before tax as per statement of profit and loss Page 46 of 370 As at March 31, Zeal Aqua Limited Draft Prospectus (Rs. in Lakhs) As at December 31, Adjusted for: Preliminary expenses Provision for gratuity Depreciation & amortization Interest & Finance Cost Profit on sale of Fixed Assests (2.53) - Interest Income on FD - (6.24) - - (14.65) - Profit on Sale of MF (2.04) Loan Processing Fees Operating profit before working capital changes Adjusted for: Increase in inventories (46.40) (21.54) 7.70 (6.85) (19.19) (Increase)/ decrease in trade receivables (771.64) (339.29) ( ) ( ) (Increase)/ decrease in loans and advances and other assets (42.56) (168.44) (226.99) (808.43) (608.86) Increase/ (decrease) in liabilities & provisions (86.60) Increase/ (decrease) in trade payables Cash generated from operations (730.80) (118.05) Direct tax paid (5.37) (34.88) (1.53) (0.87) (87.19) (150.00) Net cash flow from operating activities (A) (736.17) (152.93) Cash flow from investing activities: Purchase of fixed assets (18.64) (167.19) (593.38) (174.36) (37.44) (290.56) Sale of Fixed Assets Investments in WIP - (66.39) (174.55) Proceeds from Long-term Loans &Advances (0.29) - - Security Deposits Given (14.73) - Loans & advances given to Others (2.59) - Investment in FD (152.08) - - Interest Income on FD Purchase of Investments - - (10.09) - (311.35) (53.19) Profit on sale of MF Net cash flow used in investing activities (B) Cash flow from financing activities: (16.61) (227.35) (589.98) (326.73) (346.72) (518.30)

48 Particulars As at March 31, As at December , 2014 Proceeds from issue of equity shares Proceeds from Long Term Borrowings (37.31) Repayment of Loans & Advances (16.40) (269.68) - - ( ) (4.59) Application Money Refunded - - (13.00) Loan Processing Fees Incurred (45.13) - Finance Cost (35.33) (139.80) (281.26) (362.50) (303.00) (364.46) Net cash flow from/(used in) financing activities (C) (55.76) (320.95) (969.97) (406.36) Net increase/(decrease) in cash & cash equivalents (A+B+C) (436.04) Cash & cash equivalents as at beginning of the year Cash & cash equivalents as at end of the year Page 47 of 370

49 The following table summarizes the Issue details: Particulars Issue of Equity Shares by our Company Of which: Market Maker Reservation Portion Net Issue to the Public Pre and Post Issue Equity Shares Equity Shares outstanding prior to the Issue Equity Shares outstanding after the Issue Use of Proceeds Notes THE ISSUE Zeal Aqua Limited Draft Prospectus Details of Equity Shares 11,35,000 Equity Shares of face value of Rs.10 each fully paid of the Company for cash at price of Rs. 122 per Equity Share aggregating Rs. 1, Lakhs 60,000 Equity Shares of face value of Rs. 10 each fully paid of the Company for cash at price of Rs. 122 per Equity Share aggregating Rs Lakhs 10,75,000 Equity Shares of face value of Rs.10 each fully paid of the Company for cash at price of Rs. 122 per Equity Share aggregating Rs. 1, Lakhs Of which: 5,38,000 Equity Shares of face value of Rs. 10 each fully paid of the Company for cash at price of Rs. 122 per Equity Share aggregating Rs Lakhs will be available for allocation to investors up to Rs Lakhs 5,37,000 Equity Shares of face value of Rs. 10 each fully paid of the Company for cash at price of Rs. 122 per Equity Share aggregating Rs Lakhs will be available for allocation to investors above Rs Lakhs 30,67,200 Equity Shares 42,02,200 Equity Shares For further details please refer chapter titled Objects of the Issue beginning on page 76 of this Draft Prospectus for information on use of Issue Proceeds 1. This Issue is being made in terms of Chapter XB of the SEBI (ICDR) Regulations, 2009, as amended from time to time. The Issue is being made through the Fixed Price method and hence, as per regulation 43, sub regulation (4) of SEBI (ICDR) Regulations, at least 50% of the Net Issue to public will be available for allocation on a proportionate basis to Retail Individual Applicants, subject to valid Applications being received at the Issue Price. For further details please refer to section titled Issue Information beginning on page 259 of this Draft Prospectus. 2. The Issue has been authorized by the Board of Directors vide a resolution passed at its meeting held on March 25, 2015 and by the shareholders of our Company vide a special resolution passed pursuant to section 62(1)(c) of the Companies Act, 2013 at the EGM held on March 25, 2015 For further details please refer to chapter titled Issue Structure beginning on page 265 of this Draft Prospectus. Page 48 of 370

50 GENERAL INFORMATION Zeal Aqua Limited Draft Prospectus Our Company was incorporated as Zeal Aqua Private Limited a private limited company under the Companies Act, 1956 pursuant to a Certificate of Incorporation dated March 6, 2009 bearing registration number of 2009 issued by the Assistant Registrar of Companies, Gujarat, Dadra and Nagar Havelli, Ahmedabad. Subsequently, vide Fresh Certificate of Incorporation dated March 31, 2015, Zeal Aqua Limited, our Company was converted into a public limited company and the name of our Company was changed to Zeal Aqua Limited. Our corporate identification number is U05004GJ2009PLC REGISTERED OFFICE OF OUR COMPANY Zeal Aqua Limited At Olpad, GIDC, Pl No. 4 and 5 Ta Olpad, Surat Gujarat, India Tel: Fax: ipo@zealaqua.com Website: For details of change in the name and Registered Office of our Company, please refer to the chapter titled History and Other Corporate Matters beginning on page no 137 of this Draft Prospectus. ADDRESS OF THE REGISTRAR OF COMPANIES Registrar of Companies, Ahmedabad, Gujarat ROC Bhavan, Opposite Rupal Park Society Behind Ankur Bus Stop, Naranpura, Ahmedabad Gujarat, India OUR BOARD OF DIRECTORS The following table sets out details regarding our Board as on the date of this Draft Prospectus: Name, Designation, Term and Sr. No. Occupation 1. Name Mr. Shantilal Patel Designation: Chairman and Managing Director Term: Upto March 24, 2020 Occupation: Business 2. Name Mr. Pradeep Navik Designation: Whole-time Director Term: Upto March 24, 2020 subject to liable to retire by rotation Occupation: Business 3. Name Mr. Rohan Navik Designation: Whole-time Director Term: Upto March 24, 2020, subject to liable to retire by rotation Occupation: Business 4. Name Mr. Naginbhai Patel Designation- Independent Director Term- Term of 5 years upto March 24, 2020 Occupation- Service 5. Name Mrs. Roshan Kadodwala Designation- Independent Director Term- Term of 5 years upto March 24, 2020 Age (years) DIN Address 46-47, Hariom Nagar Society, Near Rander, Surat , Gujarat, India , Sugam Society, Rander Road, Adajan Patia, Surat , Gujarat, India , Sugam Society, Rander Road, Adajan Patia, Surat , Gujarat, India. H. No. 109, At-Kumbhari Post-Sondlakhara, Navapara Kumbhari Ta- Olpad Surat A-501, Agam Apartment, Athwalines, Surat , Gujarat Page 49 of 370

51 Name, Designation, Term and Sr. No. Occupation Occupation- Self-employed 6. Name Mr. Maheshbhai Mistry Designation- Independent Director Term- Term of 5 years upto March 24, 2020 Occupation- Service Age (years) Zeal Aqua Limited Draft Prospectus DIN Address B/21, Vaibhav Nagar Society, Palanpur Road, Surat For detailed profile of our Managing Director and other Directors, refer to chapters titled Our Management and Our Promoters and Promoter Group beginning on page numbers 143 and 155 respectively of this Draft Prospectus. COMPANY SECRETARY AND COMPLIANCE OFFICER Pratim Ramani Zeal Aqua Limited At Olpad, GIDC, Pl No. 4 and 5 Ta Olpad, Surat Gujarat, India Tel: Fax: cs@zealaqua.com CHIEF FINANCIAL OFFICER Shailendrasingh Patil Zeal Aqua Limited At Olpad, GIDC, Pl No. 4 and 5 Ta Olpad, Surat Gujarat, India. Tel: Fax: shailendra.accounts@zealaqua.com Investors may contact our Company Secretary and Compliance Officer and / or the Registrar to the Issue and / or the Lead Manager, in case of any pre-issue or post-issue related problems, such as non-receipt of letters of allotment, credit of allotted Equity Shares in the respective beneficiary account or refund orders, etc. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the relevant SCSB to whom the Application was submitted (at ASBA Locations), giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount blocked, ASBA Account number and the Designated Branch of the relevant SCSBs to whom the Application was submitted (at ASBA Locations) where the ASBA Form was submitted by the ASBA Applicants. LEAD MANAGER TO THE ISSUE Pantomath Capital Advisors Private Limited 108, Madhava Premises Co-operative Housing Society Limited, Bandra Kurla Complex Bandra East, Mumbai Tel: Fax: Website: Investor Grievance Id: ipo@pantomathgroup.com REGISTRAR TO THE ISSUE Bigshare Services Private Limited E/2, Ansa Industrial Estate Saki Vihar Road, Saki Naka Andheri (East), Mumbai Tel: Fax: Website: ipo@bigshareonline.com Page 50 of 370

52 Contact Person: Mr. Mahavir Lunawat SEBI Registration No: INM Contact Person: Vipin Gupta SEBI Registration No: INR LEGAL ADVISORS TO THE ISSUE Kanga & Co. Advocates & Solicitors Ready money Mansion 43, Veer Nariman Road, Fort Mumbai , Maharashtra, India Tel: Tel: Fax No.: / 57 Contact Person: Mr. Chetan Thakkar chetan.thakkar@kangacompany.com Web: STATUTORY AUDITORS AND PEER REVIEW AUDITORS OF OUR COMPANY* M/s. Pary & Co. Chartered Accountants 9005A, World Trade Center New Empire State Building Ring Road, Surat Tel: Fax: paryco@gmail.com Contact Person: Akash Gaglani Firm Registration number: C Membership number: * M/s Pary & Co., Chartered Accountants, were appointed on September 30, 2014 as statutory auditors and peer review auditors of our Company. The said appointment was made in order to comply with Section (IX) of Part A of Schedule VIII of SEBI (ICDR) Regulation and to also ensure compliance with the Clause 43 (I) (c) (i) of the SME Listing Agreement. Therefore, our Company has appointed M/s Pary & Co., Chartered Accountants, as the statutory auditors and peer review auditors of our Company, who hold the certificate issued by the Peer Review Board of ICAI dated 11 th June, BANKERS TO OUR COMPANY [ ] Tel: +91-[ ] Fax: +91-[ ] Website: [ ] [ ] Contact Person: [ ] [ ] Tel: +91-[ ] Fax: +91-[ ] Website: [ ] [ ] Contact Person: [ ] BANKERS TO THE ISSUE/ESCROW COLLECTION BANKS ICICI Bank Limited Capital Market Division Mistry Bhavan, Dinshaw Vachha Road Backbay Reclamation, Churchgate, Mumbai Tel: /922 Fax: anil.gadoo@icici.bank.com Contact Person: Mr. Anil Gadoo Website: SEBI Registration Number: INBI REFUND BANKERS TO THE ISSUE ICICI Bank Limited Capital Market Division Mistry Bhavan, Dinshaw Vachha Road Backbay Reclamation, Churchgate, Mumbai Tel: (91) /922 Fax: (91) anil.gadoo@icici.bank.com Page 51 of 370

53 Contact Person: Mr. Anil Gadoo Website: SEBI Registration Number: INBI SELF-CERTIFIED SYNDICATE BANKS (SCSB S) The list of Designated Branches that have been notified by SEBI to act as SCSB for the ASBA process is provided on For more information on the Designated Branches collecting ASBA Forms, see the above mentioned SEBI link. STATEMENT OF RESPONSIBILITY OF THE LEAD MANAGER Since Pantomath Capital Advisors Private Limited is the sole Lead Manager to this Issue, a statement of inter se allocation of responsibilities amongst Lead Managers is not required. CREDIT RATING This being an issue of Equity Shares, there is no requirement of credit rating for the Issue. IPO GRADING Since the issue is being made in terms of Chapter XB of the SEBI (ICDR) Regulations, there is no requirement of appointing an IPO Grading agency. BROKERS TO THE ISSUE All members of the recognized stock exchanges would be eligible to act as Brokers to the Issue. EXPERT OPINION Except as stated below, our Company has not obtained any expert opinions: Our Company has received written consent from the Statutory Auditor and Peer Review Auditors, M/s. Pary & Co., Chartered Accountants, to include its name as an expert under Section 26 of the Companies Act, 2013 in this Draft Prospectus in relation to the report dated March 31, 2015 on the restated audited financial statements of our Company and the statement of tax benefits dated April 9, 2015, included in this Draft Prospectus and such consent has not been withdrawn up to the time of delivery of this Draft Prospectus. TRUSTEES This being an issue of Equity Shares, the appointment of trustee is not required. APPRAISAL AND MONITORING AGENCY The objects of the Issue have not been appraised by any agency. The Objects of the Issue and means of finance, therefore, are based on internal estimates of our Company. As the net proceeds of the Issue will be less than Rs 50,000 Lakhs, under the sub-regulation (1) of Regulation 16 of SEBI (ICDR) Regulations, it is not required that a monitoring agency be appointed by our Company. Page 52 of 370

54 However, as per the Clause 52 of the SME Listing Agreement to be entered into with the Stock Exchange upon listing of the Equity Shares and in accordance with the corporate governance requirements, the Audit Committee of our Company would be monitoring the utilization of the Issue Proceeds. ISSUE PERIOD: ISSUE OPENS ON ISSUE CLOSES ON [ ] [ ] UNDERWRITING AGREEMENT This Issue is 100% Underwritten. The Underwriting agreement is dated April 3, 2015 Pursuant to the terms of the Underwriting Agreement; the obligations of the Underwriters are subject to certain conditions specified therein. The Underwriters has indicated their intention to underwrite the following number of specified securities being offered through this Issue: Name, address and contact information of the Underwriter/(s) Pantomath Capital Advisors Private Limited 108, Madhava Premises Co-Op Society Limited, Bandra Kurla Complex Bandra East, Mumbai Tel: Fax: Contact Person: Mr. Mahavir Lunawat ipo@pantomathgroup.com SEBI Registration No: INM Indicated Number of Equity Shares to be Underwritten Amount Underwritten (Rs. in Lakhs) 11,35, Total 11,35, In the opinion of our Board of Directors (based on a certificate given by the Underwriter), the resources of the above mentioned Underwriter are sufficient to enable them to discharge the underwriting obligations in full. The abovementioned Underwriter is registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the Stock Exchanges. The above Underwriting Agreement has been accepted by the Board of Directors acting through the Chairman of our Company and our Company has issued letters of acceptance to the Underwriter. MARKET MAKING ARRANGEMENT Choice Equity Broking Private Limited will act as the Market Maker(s) and have entered into an agreement dated April 3, 2015 with our Company and the Lead Manager. The Market Maker(s) have agreed to receive or deliver the Equity Shares in the market making process for a period of three years from the date of listing of our Equity Shares on the SME Platform of BSE in the manner specified by SEBI and in accordance with the SEBI ICDR Regulations. The Market Maker(s) shall fulfil the applicable obligations and conditions as specified in the SEBI ICDR Regulations, and its amendments from time to time and the circulars issued by the BSE and SEBI regarding this matter from time to time. Following is a summary of the key details pertaining to the Market Making arrangement: 1. The Market Maker shall be required to provide a 2-way quote for 75% of the time in a day. The same shall be monitored by BSE. Further, the Market Maker shall inform the exchange in advance for each and every black out period when the quotes are not being offered by the Market Maker. Page 53 of 370

55 Page 54 of 370 Zeal Aqua Limited Draft Prospectus 2. The minimum depth of the quote shall be Rs. 1,00,000. However, the investors with holdings less than Rs. 1,00,000/- shall be allowed to offer their holding to the Market Maker in that scrip provided that he sells his entire holding in that scrip in one lot along with a declaration to the effect to the selling broker. Based on the IPO price of Rs.122, the minimum lot size is 1,000 Equity Shares thus minimum depth of the quote shall be Rs. Rs 1,22,000 until the same would be revised by BSE. 3. Execution of the order at the quoted price and quantity must be guaranteed by the Market Maker for the quotes given by him. 4. After a period of three (3) months from the market making period, the Market Maker would be exempted to provide quote if the shares of Market Maker in our Company reaches to 25% of Issue Size (including the 60,000 Equity Shares out to be allotted under this Issue). Any Equity Shares allotted to Market Maker under this Issue over and above 60,000 Equity Shares would not be taken into consideration of computing the threshold of 25% of Issue Size. As soon as the Equity Shares of the Market Maker in our Company reduce to 24% of Issue Size, Market Maker will resume providing 2-way quotes. 5. There shall be no exemption/threshold on downside. However, in the event the Market Maker exhausts his inventory through market making process, BSE may intimate the same to SEBI after due verification. 6. There would not be more than five Market Makers for a script at any point of time and the Market Makers may compete with other Market Makers for better quotes to the investors. At this stage, Choice Equity Broking Private Limited is acting as the sole Market Maker. 7. On the first day of the listing, there will be pre-opening session (call auction) and there after the trading will happen as per the equity market hours. The circuits will apply from the first day of the listing on the discovered price during the pre-open call auction. 8. The Marker maker may also be present in the opening call auction, but there is no obligation on him to do so. 9. There will be special circumstances under which the Market Maker may be allowed to withdraw temporarily/fully from the market for instance due to system problems, any other problems. All controllable reasons require prior approval from the Exchange, while force-majeure will be applicable for non-controllable reasons. The decision of the Exchange for deciding controllable and non-controllable reasons would be final. 10. The Market Maker(s) shall have the right to terminate said arrangement by giving a three months notice or on mutually acceptable terms to the Merchant Banker, who shall then be responsible to appoint a replacement Market Maker(s). In case of termination of the above mentioned Market Making agreement prior to the completion of the compulsory Market Making period, it shall be the responsibility of the Lead Manager to arrange for another Market Maker in replacement during the term of the notice period being served by the Market Maker but prior to the date of releasing the existing Market Maker from its duties in order to ensure compliance with the requirements of regulation 106V of the SEBI (ICDR) Regulations, Further our Company and the Lead Manager reserve the right to appoint other Market Maker(s) either as a replacement of the current Market Maker or as an additional Market Maker subject to the total number of Designated Market Makers does not exceed five or as specified by the relevant laws and regulations applicable at that particulars point of time. The Market Making Agreement is available for inspection at our registered office from a.m. to 5.00 p.m. on working days. 11. BSE SME Exchange will have all margins which are applicable on the BSE Main Board viz., Markto-Market, Value-At-Risk (VAR) Margin, Extreme Loss Margin, Special Margins and Base Minimum Capital etc. BSE can impose any other margins as deemed necessary from time-to-time. 12. Punitive Action in case of default by Market Makers: BSE SME Exchange will monitor the obligations on a real time basis and punitive action will be initiated for any exceptions and/or noncompliances. Penalties / fines may be imposed by the Exchange on the Market Maker, in case he is not able to provide the desired liquidity in a particular security as per the specified guidelines. These penalties / fines will be set by the Exchange from time to time. The Exchange will impose a penalty

56 on the Market Maker in case he is not present in the market (offering two way quotes) for at least 75% of the time. The nature of the penalty will be monetary as well as suspension in market making activities / trading membership. The Department of Surveillance and Supervision of the Exchange would decide and publish the penalties / fines / suspension for any type of misconduct/ manipulation/ other irregularities by the Market Maker from time to time. 13. Price Band and Spreads: SEBI Circular bearing reference no: CIR/MRD/DP/ 02/2012 dated January 20, 2012, has laid down that for issue size up to Rs 25,000 lakhs, the applicable price bands for the first day shall be: i. In case equilibrium price is discovered in the Call Auction, the price band in the normal trading session shall be 5% of the equilibrium price. ii. In case equilibrium price is not discovered in the Call Auction, the price band in the normal trading session shall be 5% of the issue price. Additionally, the trading shall take place in TFT (Trade for Trade) segment for first 10 days from commencement of trading. The following spread will be applicable on the BSE SME Exchange/ Platform. Sr. No. Market Price Slab (In `) Proposed spread (in % to sale price) 1 Up to to to Above Pursuant to SEBI circular number CIR/MRD/DSA/31/2012 dated November 27, 2012, limits on the upper side for Market Makers during market making process has been made applicable, based on the issue size and as follows: Issue size Buy quote threshold (including mandatory initial inventory of 5% of the Issue Size) Re-entry threshold for buy quote(including mandatory initial inventory of 5% of the Issue Size) Upto Rs 20 crores 25% 24% Rs 20 to Rs 50 crores 20% 19% Rs 50 to Rs 80 crores 15% 14% Above Rs 80 crores 10% 11% The Market Making arrangement, trading and other related aspects including all those specified above shall be subject to the applicable provisions of law and/or norms issued by SEBI/BSE from time to time. Page 55 of 370

57 CAPITAL STRUCTURE Zeal Aqua Limited Draft Prospectus The share capital of our Company as of the date of this Draft Prospectus before and after the Issue is set forth below: Sr. No Particulars A AUTHORISED SHARE CAPITAL 50,00,000 Equity Shares of face value of Rs. 10/- each B ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL 30,67,200 fully paid up Equity Shares of face value of Rs. 10/- each C PRESENT ISSUE IN TERMS OF THIS DRAFT PROSPECTUS 11,35,000 Equity Shares of face value of Rs. 10/- each Which comprises 60,000 Equity Shares of face value of Rs. 10/- each at a premium of Rs. 112/- per Equity Share reserved as Market Maker Portion Net Issue to Public of 10,75,000 Equity Shares of face value of Rs. 10/- each at a premium of Rs. 112/- per Equity Share to the Public Of which 5,38,000 Equity Shares of face value of Rs.10/- each at a premium of Rs. 112/- per Equity Share will be available for allocation to Investors up to Rs. 2,00,000 5,37,000 Equity Shares of face value of Rs.10/- each at a premium of Rs. 112/-per Equity Share will be available for allocation to Investors above Rs 2,00,000 D ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL AFTER THE ISSUE 42,02,200 Equity Shares of face value of Rs. 10 E (Rs. in lakhs except share data) Aggregate Value Face Value Issue Price each SECURITIES PREMIUM ACCOUNT Before the Issue After the Issue The Issue in terms of this Draft Prospectus has been authorized pursuant to a resolution of our Board dated March 25, 2015 and by Special Resolution passed under Section 62(1) (c) of the Companies Act at an Extra Ordinary General Meeting of our shareholders held on March 25, The Company has only one class of share capital i.e. Equity Shares of face value of Rs. 10/- each only. All Equity Shares issued are fully paid-up. Our Company has no outstanding convertible instruments as on the date of this Draft Prospectus. Page 56 of 370

58 NOTES TO THE CAPITAL STRUCTURE History of change in authorized Equity Share capital of Our Company: Particulars of Change Zeal Aqua Limited Draft Prospectus Date of Shareholders Meeting From To Rs. 1,00,000 consisting of 10,000 Equity shares of Rs. 10 each. On incorporation - Rs. 1,00,000 consisting of Rs. 1,00,00,000 consisting of 10,000 Equity shares of Rs. 10 each. 10,00,000 Equity shares of Rs. 10 each. May 26, 2009 Rs. 1,00,00,000 consisting of 10,00,000 Equity shares of Rs. 10 each. Rs. 1,50,00,000 consisting of 15,00,000 Equity shares of Rs. 10 each. Rs. 2,00,00,000 consisting of 20,00,000 Equity shares of Rs. 10 each. Rs. 1,50,00,000 consisting of 15,00,000 Equity shares of Rs. 10 each. Rs. 2,00,00,000 consisting of 20,00,000 Equity shares of Rs. 10 each. Rs. 5,00,00,000 consisting of 50,00,000 Equity shares of Rs. 10 each. January 1, 2011 July 22, 2013 March 25, 2015 AGM / EGM EGM EGM EGM EGM 1. Equity Share Capital History:- Date of Allotment March 06, 2009 May 26, 2009 March 31, 2011 March 31, 2012 July 24, 2013 March 25, 2015 No. of Shares Allotted Face Value Issue Price 10, ,90, ,00, ,00, ,17, Nature of Allotment Nature of Consideration Cumulative No of Shares Cumulative Paid up Capital Subscription to MoA (1) Cash 10,000 1,00,000 Further Allotment (2) Cash 10,00,000 1,00,00,000 Further Allotment (3) Cash 13,00,000 1,30,00,000 Further Allotment (4) Cash 15,00,000 1,50,00,000 Further Allotment (5) Cash 19,17,000 1,91,70,000 11,50, NIL Bonus (6) Bonus Issue 30,67,200 3,06,72,000 (1) Initial Subscribers to Memorandum of Association subscribed 10,000 Equity Shares of face value of Rs. 10/-each fully paid at par as per the details given below: Sr. No. Name of Person No of Shares 1. Shantilal Patel 2, Pradeep Navik 2, Susanben Navik 2, Rashmiben Patel 2,500 Total 10,000 Page 57 of 370

59 (2) The Company allotted 9,90,000 Equity Shares of face value of Rs. 10/- each fully paid at par as per the details given below: Sr. No. Name of Person No of Shares Allotted 1. Shantilal Patel 2,47, Pradeep Navik 2,47, Susanben Navik 2,47, Rashmiben Patel 2,47,500 Total 9,90,000 (3) The Company allotted 3,00,000 Equity Shares of face value of Rs. 10/- each fully paid at a premium of Rs. 40 as per the details given below: Sr. No. Name of Person No of Shares Allotted Ashokbhai Khalasi on behalf of Rinkal Aqua Farm 1 Joint Holder - Pradeep Navik 10,000 Bhana Lala Khalasi on behalf of Dinkar AquaFarm 2 Joint Holder - Pradeep Navik 10,000 Ramesh Khalasi 3 Joint Holder - Pradeep Navik 10,000 Ramnik Khalasi 4 Joint Holder - Pradeep Navik 10,000 Ranjanben M. Khalasi 5 Joint Holder - Pradeep Navik 10,000 Ranjanben N. Khalasi on behalf of Darshan Aqua Farm 6 Joint Holder - Pradeep Navik 10,000 Soma Vala Khalasi on behalf of Deep Aqua Farm 7 Joint Holder - Pradeep Navik 10,000 Pravin Khalasi 8 Joint Holder - Pradeep Navik 10,000 Vasantiben Khalasi on behalf of Mahalaxmi Aqua Farm 9 Joint Holder - Pradeep Navik 10,000 Jayantibhai Khalasi 10 Joint Holder - Pradeep Navik 10,000 Ushaben Khalasi 11 Joint Holder - Pradeep Navik 10,000 Amtha Lala Khalasi 12 Joint Holder - Shantilal Patel 10,000 Champak Khalasi 13 Joint Holder - Shantilal Patel 10,000 Dhaval Patel 14 Joint Holder - Shantilal Patel 20,000 Dhrubhai Khalasi on behalf of Dilip Aqua Farm 15 Joint Holder - Shantilal Patel 10,000 Dinesh Deva Khalasi 16 Joint Holder - Shantilal Patel 10,000 Madhubhai Khalasi on behalf of Arish Aqua Farm 17 Joint Holder - Shantilal Patel 10,000 Meenaben Khalasi 18 Joint Holder - Shantilal Patel 10,000 Mukesh Khalasi 19 Joint Holder - Shantilal Patel 5,000 Mukesh Khalasi on behalf of Lotus Aqua Farm 20 Joint Holder - Shantilal Patel 5,000 Page 58 of 370

60 Sr. No. Name of Person No of Shares Allotted Uttam I. Khalasi 21 Joint Holder - Shantilal Patel 10,000 Uttam R. Khalasi 22 Joint Holder - Shantilal Patel 10,000 Kimi Patel 23 Joint Holder - Shantilal Patel 20,000 Mary Moses 24 Joint Holder - Shantilal Patel 20,000 Rohan Navik 25 Joint Holder - Pradeep Navik 30, Pradeep Navik 10,000 Total 3,00,000 (4) The Company allotted 2,00,000 Equity Shares of face value of Rs. 10/- each fully paid at a premium of Rs 190 as per the details given below: Sr. No. Name of Person No of Shares Allotted 1. Navik Aqua Private Limited 50, Rati Aqua Private Limited 50, Goldpink Aquaculture Private Limited 50, Susan Aqua Private Limited 50,000 Total 2,00,000 (5) The Company allotted 4,17,000 Equity Shares of face value of Rs. 10/- each fully paid at a premium of Rs 50 as per the details given below: Sr. No. Name of Person No of Shares Allotted 1. Agave Tradecom Private Limited 4,17,000 Total 4,17,000 (6) The Company issued Bonus of 11,50,200 Equity Shares of face value of Rs. 10/- each fully paid at a ratio of 3 Equity Shares for every 5 Equity Shares held as per the details given below: Sr. No. Name of Person No of Shares Allotted 1 Pradeep Navik 1,55,820 2 Shantilal Patel 1,67,940 3 Susanben Navik 1,55,880 4 Rashmiben Patel 1,55,880 5 Rohan Navik 18,060 6 Navik Aqua Private Limited 30,000 7 Rati Aqua Private Limited 48,360 8 Goldpink Aquaculture Private Limited 30,000 9 Susan Aqua Private Limited 30, Agave Tradecom LLP 2,50, Bomi Olpadwala Dhaval Patel 6, Mary Moses 18, Kimi Navik 12, Ramesh Khalasi 6, Ramnik Khalasi 6,000 Page 59 of 370

61 Sr. No. Name of Person No of Shares Allotted 17 Ranjanben M. Khalasi 6, Pravin Khalasi 6, Jayantibhai Khalasi 6, Ushaben Khalasi 6, Amtha Lala Khalasi 6, Champak Khalasi 6, Dinesh Deva Khalasi 6, Meenaben Khalasi 6, Uttam I. Khalasi 6, Uttam R. Khalasi 6,000 Total 11,50,200 The Equity Shares issued pursuant to the bonus issue are not ineligible as per Regulation 33 of the SEBI ICDR Regulations as the same are neither resulting from a bonus issue by utilization of revaluation reserves nor unrealized profits of our Company nor from the bonus issue against Equity Shares which are ineligible for minimum Promoters contribution. Page 60 of 370

62 2. Issue of Equity Shares for consideration other than cash Zeal Aqua Limited Draft Prospectus Date of Number of Face Value Issue Price Nature of Reasons for No. of Shares Allottees Allotment Equity Shares (Rs.) (Rs.) Consideration allotment Allotted March 25, 11,50, Nil NA Bonus issue of Pradeep Navik 1,55, Equity Shares in Shantilal Patel 1,67,940 the ratio of 3:5 Susanben Navik 1,55,880 Rashmiben Patel 1,55,880 Rohan Navik 18,060 Navik Aqua Private Limited 30,000 Rati Aqua Private Limited 48,360 Goldpink Aquaculture Private Limited 30,000 Susan Aqua Private Limited 30,000 Agave Tradecom LLP 2,50,200 Bomi Olpadwala 60 Dhaval Patel 6,000 Mary Moses 18,000 Kimi Navik 12,000 Ramesh Khalasi 6,000 Ramnik Khalasi 6,000 Ranjanben M. Khalasi 6,000 Pravin Khalasi 6,000 Jayantibhai Khalasi 6,000 Ushaben Khalasi 6,000 Amtha Lala Khalasi 6,000 Champak Khalasi 6,000 Dinesh Deva Khalasi 6,000 Meenaben Khalasi 6,000 Uttam I. Khalasi 6,000 Uttam R. Khalasi 6,000 Total 11,50, Till date no Equity Shares have been allotted pursuant to any scheme approved under Section of the Companies Act, Page 61 of 370

63 4. Our Company has not revalued its assets since inception and has not issued any Equity Shares (including bonus shares) by capitalizing any revaluation reserves. 5. No shares have been issued at price below Issue Price within last one year from the date of this Draft Prospectus except the bonus issue as mentioned below: Date of Allotment Number of Equity Shares Face Value (Rs.) Issue Price (Rs.) Nature of Consideration Reasons for allotment Allottees No. of Shares Allotted March 25, 11,50, Nil NA Bonus issue of Pradeep Navik 1,55, Equity Shares in Shantilal Patel 1,67,940 the ratio of 3:5 Susanben Navik 1,55,880 Rashmiben Patel 1,55,880 Rohan Navik 18,060 Navik Aqua Private Limited 30,000 Rati Aqua Private Limited 48,360 Goldpink Aquaculture Private Limited 30,000 Susan Aqua Private Limited 30,000 Agave Tradecom LLP 2,50,200 Bomi Olpadwala 60 Dhaval Patel 6,000 Mary Moses 18,000 Kimi Navik 12,000 Ramesh Khalasi 6,000 Ramnik Khalasi 6,000 Ranjanben M. Khalasi 6,000 Pravin Khalasi 6,000 Jayantibhai Khalasi 6,000 Ushaben Khalasi 6,000 Amtha Lala Khalasi 6,000 Champak Khalasi 6,000 Dinesh Deva Khalasi 6,000 Meenaben Khalasi 6,000 Uttam I. Khalasi 6,000 Uttam R. Khalasi 6,000 Total 11,50, Build-up of Promoters shareholding, Promoters contribution and lock-in Page 62 of 370

64 Page 63 of 370 Zeal Aqua Limited Draft Prospectus i. Build Up of Promoters shareholdings As on the date of this Draft Prospectus, our Promoters Mr. Shantilal Patel and Mr Pradeep Navik hold 8, 63, 360 Equity Shares of our Company. None of the Equity Shares held by our Promoters is subject to any pledge. a) Mr. Shantilal Patel Date of Allotment/ Transfer No. of Equity Shares Face value per Share (Rs.) Issue / Acquisition/ Transfer price (Rs.)* Nature of Transactions Pre-issue shareholding % Post- issue shareholding % Lock-in Period Source of Funds No of Shares Pledged March 6, , Subscription to MoA 0.08% 0.06% 3 Years Savings Nil Saving & Partner s May 26, ,47, Further Allotment 8.07% 5.89% 3 Years Capital withdrawn ** Nil December 2, Not (100) Transfer (Sold) 0.00% 0.00% Applicable Nil October 5, Not 10, Nil **Gift Received 0.33% 0.24% 3 Years 2013 Applicable Nil October 5, Not 20, Nil **Gift Received 0.65% 0.48% 3 Years 2013 Applicable Nil March 25, Not 1,67, NIL Bonus Issue 5.48% 4.00% 3 Years 2015 Applicable Nil *Cost of acquisition excludes Stamp Duty and the shares were made fully paid on the date of allotment. **These shares were received via gift deed dated October 5, 2013 b) Pradeep Navik Date of Allotment/ Transfer No. of Equity Shares Face value per Share (Rs.) Issue / Acquisition/ Transfer price (Rs.)* March 6, , Nature of Transactions Subscription to MoA Pre-issue shareholding % Post- issue shareholding % Lock-in Period Source of funds No of Shares Pledged 0.08% 0.06% 3 Years Saving Nil May 26, ,47, Further Allotment 8.07% 5.89% 3 Years Saving Partner s & Nil

65 Capital withdrawn *** December 2, Not (300) Transfer (sold) -0.01% -0.01% Nil 2010 Applicable March 31, 10, Further Allotment 0.33% 0.24% 3 Years Saving Nil 2011 March 25, Not 1,55, NIL Bonus Issue 5.08% 3.71% 3 Years Nil 2015 Applicable *Cost of acquisition excludes Stamp Duty and the shares were made fully paid on the date of allotment Page 64 of 370

66 ** Details of Partner s Capital withdrawn by Mr. Shantilal Patel are as follows:- Zeal Aqua Limited Draft Prospectus Particulars Amount Address Agni Aqua Farm 1,00, Plot no:17, Nesh, Post Karanj, Tal Olpad, Surat, Gujarat Dhaval Aqua Farm 8,35, Mor, Tal Olpad, Olpad, Surat, Gujarat Jal Aqua Farm 1,00, Plot no:19, Nesh, Post Karanj, Tal Olpad, Surat, Gujarat Preety Aqua Farm 7,15, Mandroi, Mandroi, Olpad, Surat, Gujarat Pruthvi Aqua Farm 1,00, Plot no:20, Nesh, Post Karanj, Tal Olpad, Surat, Gujarat S.R Aqua Farm 5,00, Plot 3, Block 846, Mor, Olpad, Surat, Gujarat Vayu Aqua Farm 1,00, Plot no:18, Nesh, Post Karanj, Tal Olpad, Surat, Gujarat Total 24,50, ***Details of Partner s Capital withdrawn by Mr Pradeep Navik are as follows :- From Amount Address Shiv Dham Aqua 3,00, , Sugam Society, Rander Road,Surat Shiv Shakti Aqua Farm 4,75, Post: Sara s, Tal: Olpad, Dist Surat Sai Jala Aqua Farm 1,50, Post: Saras, Tal: Olpad, Dist Surat Narmada Aqua Farm 2,50, Post: Delasa, Tal: Olpad Dist: Surat Mahadev Aqua Farm 3,00, Post: Saras, Tal: Olpad, Dist Surat Total 14,75, ii. Details of Promoter s Contribution locked in for three years: Pursuant to Regulation 32 and 36 of SEBI (ICDR) Regulations, an aggregate of per cent of the post-issue capital held by our Promoter shall be considered as Promoters Contribution ( Promoters Contribution ) and locked-in for a period of three years from the date of Allotment. The lock-in of the Promoters Contribution would be created as per applicable law and procedure and details of the same shall also be provided to the Stock Exchange before listing of the Equity Shares. Our Promoters have granted consent to include such number of Equity Shares held by them as may constitute per cent of the post-issue Equity Share Capital of our Company as Promoters Contribution and have agreed not to sell or transfer or pledge or otherwise dispose of in any manner, the Promoters Contribution from the date of filing of this Draft Prospectus until the commencement of the lock-in period specified above. Date of Allotment/A cquisition/ Transaction Date when made fully paid up No. of Shares Allotted/ Transferred Face Value Page 65 of 370 Issue Price/ Transfer Price Nature of Allotment % of Post Issue shareho lding Lock in Period Shantilal Patel March 6, March 6, Subscriptio 2,400* n to MoA 0.06% 3 Years May 26, May 26, Further 2,47, Allotment 5.89% 3 Years October 5, October 5, Transfer 10, Nil (Acquired) 0.24% 3 Years October 5, October 5, 20, Nil Transfer 0.48% 3 Years

67 iii. iv. Date of Allotment/A cquisition/ Transaction Date when made fully paid up No. of Shares Allotted/ Transferred Face Value Issue Price/ Transfer Price Zeal Aqua Limited Draft Prospectus Nature of Allotment (Acquired) March 25, March 25, Bonus 1,67, NIL Issue Pradeep Navik March 6, March 6, Subscriptio 2,200** n to MoA May 26, May 26, Further 2,47, Allotment March 31, March 31, Further 10, Allotment March 25, March 25, Bonus 1,55, NIL Issue *100 shares transferred on 02/12/2010 from allotment of 2,500 shares. *300 shares transferred on 02/12/2010 from allotment of 2,500 shares. % of Post Issue shareho lding Lock in Period 4.00% 3 Years 0.05% 3 Years 5.89% 3 Years 0.24% 3 Years 3.71% 3 Years The Equity Shares that are being locked in are not ineligible for computation of Promoter s contribution in terms of Regulation 33 of the SEBI Regulations. In Connection, we confirm the following: a) The Equity Shares offered for minimum Promoters contribution of 20.55% have not been acquired in the three years preceding the date of this Draft Prospectus for consideration other than cash and revaluation of assets or capitalization of intangible assets nor resulted from a bonus issue out of the revaluation reserves or unrealized profits of the Company or against Equity Shares which are otherwise ineligible for computation of Promoters contribution; b) The minimum Promoters contribution does not include Equity Shares acquired during the one year preceding the date of this Draft Prospectus at a price lower than the Issue Price ; c) Our Company has not been formed by the conversion of a partnership firm into a company and thus, no Equity Shares have been issued to our Promoters upon conversion of a partnership firm; d) The Equity Shares held by the Promoters and offered for minimum Promoters contribution are not subject to any pledge; e) We are in the process of getting the equity shares held by the Promoters in dematerialized form; and f) The Equity Shares offered for Promoter s contribution do not consist of Equity Shares for which specific written consent has not been obtained from the Promoter for inclusion of its subscription in the Promoter s contribution subject to lock-in. g) Private placement made by solicitation of subscription from unrelated persons either directly or through any intermediary. Details of Equity Shares locked-in for one year Other than the above Equity Shares that are locked in for three years, the entire pre-issue Equity Share capital of our Company shall be locked-in for a period of one year from the date of allotment in the Public Issue. Other requirements in respect of lock-in Pursuant to Regulation 39 of the SEBI ICDR Regulations, the locked-in Equity Shares held by the Promoter, as specified above, can be pledged only with scheduled commercial banks or public financial institutions as collateral security for loans granted by such scheduled commercial banks or public financial institution, provided that the pledge of the Equity Shares is one of the terms of the sanction of the loan. Provided that securities locked in as Promoter s Contribution for 3 years under Regulation 36(a) of the SEBI ICDR Regulations may be pledged only if, in addition to fulfilling the above requirement, Page 66 of 370

68 the loan has been granted by such scheduled commercial bank or public financial institution for the purpose of financing one or more of the objects of the Issue. Further, pursuant to Regulation 40 of the SEBI ICDR Regulations, the Equity Shares held by persons other than the Promoters prior to the Issue may be transferred to any other person holding the Equity Shares which are locked-in as per Regulation 37 of the SEBI ICDR Regulations, along with the Equity Shares proposed to be transferred, provided that lock-in on such Equity Shares will continue for the remaining period with the transferee and such transferee shall not be eligible to transfer such Equity Shares till the lock-in period stipulated under the SEBI ICDR Regulations has ended, subject to compliance with the Takeover Code, as applicable We further confirm that our Promoter s Contribution of 20.55% of the post Issue Equity Share capital does not include any contribution from Alternative Investment Fund. Page 67 of 370

69 7. The table below represents the shareholding pattern of our Company in accordance with clause 37 of the SME Listing Agreement, as on the date of this Draft Prospectus: Category Code Category of shareholder No. Of shareholders Total numbers of shares Number of shares held in dematerialized form Total shareholding as a percentage of total number of shares As a percentage of (A+B) As a percentage of (A+B+C) Shares pledged or otherwise encumbered Number of shares As a Percentage (I) (II)) (III) (IV) (V) (VI) (VII) (VIII) (IX) (A) Promoter and Promoter Group (1) Indian (a) Individuals/Hindu Undivided Family 8 18,38,880 [ ] (b) Central Government/State Government(s) (c) Bodies Corporate 5 10,36,160 [ ] (d) Financial Institutions/Banks (e) Any other (Specify) SUB TOTAL (A)(1) 13 28,75,040 [ ] (2) Foreign (a) Individuals (Non-Resident Individuals/Foreign Individuals) (b) Bodies Corporate (c) Institutions/FPI (d) Any other (Specify) SUB TOTAL (A)(2) 13 28,75,040 [ ] *Total Shareholding of Promoter and Promoter Group (A)=(A)(1)+(A)(2) - - (B) Public shareholding (1) Institutions (a) Mutual Funds/UTI (b) Financial Institutions/Banks (c) Central Government/State Government(s) Page 68 of 370

70 Category Code Category of shareholder No. Of shareholders Total numbers of shares Page 69 of 370 Number of shares held in dematerialized form Total shareholding as a percentage of total number of shares As a percentage of (A+B) As a percentage of (A+B+C) Shares pledged or otherwise encumbered Number of shares As a Percentage (I) (II)) (III) (IV) (V) (VI) (VII) (VIII) (IX) (d) Venture Capital Fund (e) Insurance Companies (f) Foreign Portfolio Investors (g) Foreign Venture Capital Investors (h) Nominated Investors (as defined in Chapter XB of SEBI (ICDR) Regulations) (i) Market Makers (j) Any other (Specify) SUB TOTAL (B) (1) - - (2) Non-Institutions (a) Bodies Corporate (b) Individuals i) Individual shareholders holding nominal share Capital up to Rs.1 lakh [ ] ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh 12 1,92,000 [ ] (c) Any other (Specify)Individual (Non- Resident individuals ) SUB TOTAL (B) (2) 13 1,92,160 [ ] Total Public Shareholding (B)=(B)(1)+(B)(2) 13 1,92,160 [ ] TOTAL (A)+(B) 26 30,67,200 [ ] % % - - (C) Shares held by Custodians and against which Depository Receipts have been issued GRAND TOTAL (A)+(B)+(C) 26 30,67,200 [ ] % % - - *Due to family understanding and restructuring persons as mentioned below, who fall under regulation 2(1)(zb) of SEBI (ICDR) Regulation are excluded from the purview of Promoter Group.

71 Further the entities falling under the definition of Promoter Group on account of being related to the below mentioned persons are also excluded. Sr No Persons excluded from Promoter Group Relation with Promoter 1 Manoj Patel Brother of Shantilal Patel 2 Kiran Patel Brother of Shantilal Patel 3 Mina Roy Sister of Shantilal Patel 4 Sharda Patel Sister of Shantilal Patel 5 Bharat Navik Brother of Pradeep Navik 6 Lila Khalasi Sister of Pradeep Navik 7 Bhanu Navik Sister of Pradeep Navik Our Company will file the shareholding pattern of our Company, in the form prescribed under clause 37 of the Listing Agreement, one day prior to the listing of Equity Shares. The shareholding pattern will be uploaded on the website of BSE before commencement of trading of such Equity Shares. 8. Following are the details of the holding of securities (including shares, warrants, convertible securities) of persons belonging to the category Promoter and Promoter Group : Sr. No. Name of the Shareholder No. of Equity Shares Pre Issue Page 70 of 370 % of Pre- Issue Capital No. of Equity Shares Post Issue % of Post- Issue Capital Promoter 1. Pradeep Navik 4,15, ,15, Shantilal Patel 4,47, ,47, Promoter Group 3. Susanben Navik 4,15, ,15, Rashmiben Patel 4,15, ,15, Rohan Navik 48, , Navik Aqua Private Limited 80, , Rati Aqua Private Limited 1,28, ,28, Goldpink Aquaculture Private Limited 80, , Susan Aqua Private Limited 80, , Agave Tradecom LLP 6,67, ,67, Dhaval Patel 16, , Mary Moses 48, , Kimi Navik 32, , Total 28,75, ,75, The average cost of acquisition of or subscription to Equity Shares by our Promoter is set forth in the table below: Name of the Promoter No. of Shares held Average cost of Acquisition (In Rs.) Shantilal Patel 4,47, Pradeep Navik 4,15, No persons belonging to the category Public hold securities (including shares, warrants, convertible securities) of more than 1% of the total number of shares. 11. The lists of top 10 shareholders of our Company and the number of Equity Shares held by them as on the date of filing, ten days before the date of filing and two years before the date of filing of this Draft Prospectus are set forth below: a. Particulars of the top ten shareholders as on the date of filing this Draft Prospectus: Number of Equity % of Total Paid-Up Sr. No. Name of Shareholders Shares Capital 1. Agave Tradecom LLP (formerly Agave 6,67, %

72 Sr. No. Name of Shareholders Page 71 of 370 Zeal Aqua Limited Draft Prospectus Number of Equity Shares % of Total Paid-Up Capital Tradecom Pvt Ltd) 2. Shantilal Patel 4,47, % 3. Susanben Navik 4,15, % 4. Rashmiben Patel 4,15, % 5. Pradeep Navik 4,15, % 6. Rati Aqua Private Limited 1,28, % 7. Navik Aqua Private Limited 80, % 8. Goldpink Aqua Culture Private Limited 80, % 9. Susan Aquaculture Private Limited 80, % 10. Rohan Navik 48, % Total 27,79, % Note: Our Company has 26 shareholders as on date of this Draft Prospectus b. Particulars of top ten shareholders ten days prior to the date of filing this Draft Prospectus: Sr. No. Name of Shareholders Number of Equity Shares % of Total Paid-Up Capital 21.75% 1. Agave Tradecom LLP (formerly Agave Tradecom Pvt Ltd) 6,67, Shantilal Patel 4,47, % 3. Susanben Navik 4,15, % 4. Rashmiben Patel 4,15, % 5. Pradeep Navik 4,15, % 6. Rati Aqua Private Limited 1,28, % 7. Navik Aqua Private Limited 80, % 8. Goldpink Aqua Culture Private Limited 80, % 9. Susan Aquaculture Private Limited 80, % 10. Rohan Navik 48, % Total 27,79, % Note: Our Company has 26 shareholders ten days prior to the date of this Draft Prospectus c. Particulars of the top ten shareholders two years prior to the date of filing of this Draft Prospectus Name of Shareholders Number of % of Total Paid-Up Equity Shares Capital 1. Pradeep Navik 2,59, % 2. Shantilal Patel 2,49, % 3. Susanben Navik 2,49, % 4. Rashmiben Patel 2,49, % 5. Navik Aqua Private Limited 50, % 6. Rati Aqua Private Limited 50, % 7. Goldpink Aqua Culture Private Limited 50, % 8. Susan Aquaculture Private Limited 50, % 9. Rohan Navik Joint Holder -Pradeep Navik 30, % 10. Dhaval Patel Joint Holder Shantilal Patel 20, % 11. Kimi Patel Joint Holder Shantilal Patel 20, % 12. Mary Moses Joint Holder Shantilal Patel 20, % Total 12,99, % Sr. No. Note: Our Company has 41 shareholders two years prior to the date of this Draft Prospectus 12. Our Company does not have any Employee Stock Option Scheme / Employee Stock Purchase Plan for our employees and we do not intend to allot any shares to our employees under Employee Stock Option Scheme / Employee Stock Purchase Plan from the proposed issue. As and when, options are granted to our employees under the Employee Stock Option Scheme, our Company shall comply with the SEBI (Employee Stock Option Scheme and Employees Stock Purchase Plan) Guidelines 2014.

73 13. Neither the Lead Manager viz. Pantomath Capital Advisors Private Limited, nor their associates hold any Equity Shares of our Company as on the date of the Draft Prospectus. 14. Under-subscription in the net issue, if any, in any category, would be allowed to be met with spill over from any other category or a combination of categories at the discretion of our Company in consultation with the Lead Manager and the SME Platform of BSE. 15. As on the date of this Draft Prospectus, our Company has not allotted any Equity Shares pursuant to any scheme approved under the Companies Act. 16. Except as set out below none of the members of the Promoter Group, the Promoter and its directors, or our Directors and their immediate relatives have purchased or sold any Equity Shares during the period of six months immediately preceding the date of filing of the Draft Prospectus with the Stock Exchange. There have been transfer of shares (as mentioned below), on March 20, 2015 Name of the transferor Name of the transferee Nos. of shares transferred Jagdish Navik, Joint Holder Kimi Navik Rati Aqua Private Limited 100 Leela Khalasi on behalf of Khodiyar Aqua Farm Rati Aqua Private Limited 100 Madhubhai Khalasi on behalf of Vicky Aqua Farm Rati Aqua Private Limited 100 Lalabhai Khalasi, Joint Holder Mary Moses Rati Aqua Private Limited 100 Kalaben Khalasi, Joint Holder Preety Mistry Rati Aqua Private Limited 100 Bhanuben Navik on behalf of Sai Leela Aqua Farm Rati Aqua Private Limited 100 Bhana Lala Khalasi on behalf of Dinkar AquaFarm Joint Holder - Pradeep Navik Rati Aqua Private Limited Ranjanben N. Khalasi on behalf of Darshan Aqua Farm, Joint Holder - Pradeep Navik Rati Aqua Private Limited Soma Vala Khalasi on behalf of Deep Aqua Farm Joint Holder - Pradeep Navik Rati Aqua Private Limited Dhirubhai Khalasi on behalf of Dilip Aqua Farm Joint Holder - Shantilal Patel Mary Moses Madhubhai Khalasi on behalf of Arish Aqua Farm Joint Holder - Shantilal Patel Kimi Navik Mukesh Khalasi, Joint Holder - Shantilal Patel Kimi Navik 5000 Mukesh Khalasi on behalf of Lotus Aqua Farm Joint Holder - Shantilal Patel Kimi Navik 5000 Vasantiben Khalasi on behalf of Mahalaxmi Aqua Farm, Joint Holder - Pradeep Navik SusanNavik Ashokbhai Khalasi on behalf of Rinkal Aqua Farm Joint Holder - Pradeep Navik Rashmiben Patel Ramesh Khalasi, Joint Holder - Pradeep Navik Ramesh Khalasi Ramnik Khalasi, Joint Holder - Pradeep Navik Ramnik Khalasi Ranjanben M. Khalasi, Joint Holder - Pradeep Navik Ranjanben M. Khalasi Pravin Khalasi, Joint Holder - Pradeep Navik Pravin Khalasi Jayantibhai Khalasi, Joint Holder - Pradeep Navik Jayantibhai Khalasi Ushaben Khalasi, Joint Holder - Pradeep Navik Ushaben Khalasi Amtha Lala Khalasi, Joint Holder - Shantilal Patel Amtha Khalasi Champak Khalasi, Joint Holder - Shantilal Patel Champak Khalasi Dinesh Deva Khalasi, Joint Holder - Shantilal Patel Dinesh Khalasi Meenaben Khalasi, Joint Holder - Shantilal Patel Meenaben Khalasi Uttam I. Khalasi, Joint Holder - Shantilal Patel Uttam I Khalasi Uttam R. Khalasi, Joint Holder - Shantilal Patel Uttam R Khalasi Mary Moses, Joint Holder - Shantilal Patel Mary Moses Rohan Navik, Joint Holder - Pradeep Navik Rohan Navik Dhaval Patel, Joint Holder - Shantilal Patel Dhaval Patel Page 72 of 370

74 The Company has also issued bonus shares as mentioned below: Date of Allotment Number of Equity Shares Face Value (Rs.) Issue Price (Rs.) Nature of Consideration Reasons for allotment Allottees Share Allotted Pradeep Navik 1,55,820 Shantilal Patel 1,67,940 Susanben Navik 1,55,880 Rashmiben Patel 1,55,880 Rohan Navik 18,060 Navik Aqua Private Limited 30,000 Rati Aqua Private Limited 48,360 Goldpink Aquaculture Private Limited 30,000 Susan Aqua Private Limited 30,000 Agave Tradecom LLP 2,50,200 Bomi Olpadwala 60 Dhaval Patel 6,000 March 25, Mary Moses 18,000 11,50, NIL NA Bonus Issue 2015 Kimi Navik 12,000 Ramesh Khalasi 6,000 Ramnik Khalasi 6,000 Ranjanben M. Khalasi 6,000 Pravin Khalasi 6,000 Jayantibhai Khalasi 6,000 Ushaben Khalasi 6,000 Amtha Lala Khalasi 6,000 Champak Khalasi 6,000 Dinesh Deva Khalasi 6,000 Meenaben Khalasi 6,000 Uttam I. Khalasi 6,000 Uttam R. Khalasi 6,000 Total 11,50,200 Page 73 of 370

75 17. There are no Equity Shares against which depository receipts have been issued. 18. Other than the Equity Shares, there are no other class of securities issued by our Company. 19. There will be no further issue of capital, whether by way of issue of bonus shares, preferential allotment, right issue or in any other manner during the period commencing from the date of the Draft Prospectus until the Equity Shares have been listed. Further, our Company does not intend to alter its capital structure within six months from the date of opening of the Issue, by way of split/consolidation of the denomination of Equity Shares. However our Company may further issue Equity Shares (including issue of securities convertible into Equity Shares) whether preferential or otherwise after the date of the listing of equity shares to finance an acquisition, merger or joint venture or for regulatory compliance or such other scheme of arrangement or any other purpose as the Board may deem fit, if an opportunity of such nature is determined by its Board of Directors to be in the interest of our Company 20. None of the persons/entities comprising our Promoter Group, or our Directors or their relatives have financed the purchase by any other person of securities of our Company other than in the normal course of the business of any such entity/individual or otherwise during the period of six months immediately preceding the date of filing of this Draft Prospectus. 21. Our Company, our Promoters, our Directors and the Lead Manager have not entered into any buy back or standby or similar arrangements for the purchase of Equity Shares being offered through the Issue from any person. 22. There are no safety net arrangements for this public issue. 23. An over-subscription to the extent of 10% of the Issue can be retained for the purpose of rounding off to the nearest multiple of minimum allotment lot, while finalising the Basis of Allotment. Consequently, the actual Allotment may go up by a maximum of 10% of the Issue, as a result of which, the post-issue paid up capital after the Issue would also increase by the excess amount of Allotment so made. In such an event, the Equity Shares held by our Promoters and subject to lock- in shall be suitably increased; so as to ensure that a minimum of 20% of the post Issue paid-up capital is locked in. 24. In case of over-subscription in all categories the allocation in the Issue shall be as per the requirements of Regulation 43 (4) of SEBI (ICDR) Regulations, as amended from time to time. 25. As on date of this Draft Prospectus there are no outstanding warrants, options or rights to convert debentures loans or other financial instruments into our Equity Shares. 26. All the Equity Shares of our Company are fully paid up as on the date of the Draft Prospectus. Further, since the entire money in respect of the Issue is being called on application, all the successful applicants will be issued fully paid-up equity shares. 27. As per RBI regulations, OCBs are not allowed to participate in this Issue. Page 74 of 370

76 28. Our Company has not raised any bridge loans against the proceeds of the Issue. 29. Our Company undertakes that at any given time, there shall be only one denomination for our Equity Shares, unless otherwise permitted by law. 30. Our Company shall comply with such accounting and disclosure norms as specified by SEBI from time to time. 31. An Applicant cannot make an application for more than the number of Equity Shares being issued through this Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investors. 32. No payment, direct or indirect in the nature of discount, commission, and allowance or otherwise shall be made either by us or our Promoters to the persons who receive allotments, if any, in this Issue. 33. We have 26 shareholders as on the date of filing of the Draft Prospectus. 34. Our Promoters and the members of our Promoter Group will not participate in this Issue. 35. Our Company has not made any public issue since its incorporation. 36. Our Company shall ensure that transactions in the Equity Shares by the Promoters and the Promoter Group between the date of filing the Draft Prospectus and the Issue Closing Date shall be reported to the Stock Exchange within twenty-four hours of such transaction. 37. For the details of transactions by our Company with our Promoter Group, Group Companies during the period ended December 31, 2014 and for the financial years ended March 31, 2012, 2013 and 2014 please refer to paragraph titled Details of Related Parties Transactions as Restated in the chapter titled Financial Statements as restated beginning on page 173 of the Draft Prospectus. 38. None of our Directors or Key Managerial Personnel holds Equity Shares in our Company, except as stated in the chapter titled Our Management beginning on page 143 of the Draft Prospectus. Page 75 of 370

77 OBJECTS OF THE ISSUE Zeal Aqua Limited Draft Prospectus Our Company proposes to utilize the funds which are being raised towards funding the following objects and achieve the benefits of listing on the SME platform of BSE. The objects of the Issue are:- 1. Working Capital requirements; 2. General Corporate Purpose; 3. Meet Issue Expenses. We believe that listing will enhance our Company s corporate image, brand name and create a public market for our Equity Shares in India. The main objects clause of our Memorandum enables us to undertake the activities for which funds are being raised in the Issue. The existing activities of our Company are within the objects clause of our Memorandum. The fund requirement and deployment is based on internal management estimates and has not been appraised by any bank or financial institution. FUND REQUIREMENTS Our funding requirements are dependent on a number of factors which may not be in the control of our management, changes in our financial condition and current commercial conditions. Such factors may entail rescheduling and / or revising the planned expenditure and funding requirement and increasing or decreasing the expenditure for a particular purpose from the planned expenditure. Object of the Issue is to finance the Working Capital Requirement, General Corporate Purpose and Issue Expenses. UTILISATION OF ISSUE PROCEEDS We intend to utilize the proceeds of the Fresh Issue, in the manner set forth below: Sr. No. Particulars Amount (in Rs. Percentage of Lakhs) total Issue (%) 1. Working Capital Requirement 1, General Corporate Purpose *Issue Expenses Total 1, *As on date of the Draft Prospectus, Company has incurred Rs. [ ] Lakhs towards Issue Expenses. MEANS OF FINANCE The requirements of the objects detailed above are intended to be funded from the Proceeds of the Issue. Accordingly, we confirm that there is no requirement for us to make firm arrangements of finance through verifiable means towards at least 75% of the stated means of finance, excluding the amount to be raised from the proposed Issue. The fund requirement and deployment are based on internal management estimates and have not been appraised by any bank or financial institution. These are based on current conditions and are subject to change in light of changes in external circumstances or costs, other financial conditions, business or strategy, as discussed further below. In case of variations in the actual utilization of funds allocated for the purposes set forth above, increased fund requirements for a particular purpose may be financed by surplus funds, if any, available Page 76 of 370

78 in respect of the other purposes for which funds are being raised in this Issue. If surplus funds are unavailable, the required financing will be through our internal accruals and/or debt. We may have to revise our fund requirements and deployment as a result of changes in commercial and other external factors, which may not be within the control of our management. This may entail rescheduling, revising or cancelling the fund requirements and increasing or decreasing the fund requirements for a particular purpose from its fund requirements mentioned below, at the discretion of our management. In case of any shortfall or cost overruns, we intend to meet our estimated expenditure from internal accruals and/or debt. Details of Utilization of Issue Proceeds 1. Working Capital Our business is working capital intensive. We finance our working capital requirements from various banks / financial institutions and from our internal accruals. As on, March 31, 2014 and March 31, 2015 our Company s net working capital consisted of Rs 1, Lakhs (based on the audited and restated financials) and Rs 2, (based on provisional data) respectively, The total working capital requirement as of March 31, 2016 is estimated to be Rs. 4, lakhs. The incremental working capital requirement for the year ending March 31, 2016 will be Rs 1, lakhs, which will be met through the net Issue proceeds, fund based borrowings and internal accruals. Since the working capital requirement is staggered over the financial year and , we propose to deploy the amount as working capital for payment of trade payables or for purchase of raw material or for any other working capital purpose as may be determined by the management of our Company. Basis of estimation of working capital requirement The details of our Company s working capital requirement and funding of the same based on the audited and restated standalone financial statements as at March 31, 2014 and provisional data for are as set out in the table below: (Rs. In Lakhs) Particulars (Based On Provisional Data) Current Assets Inventories Trade Receivables 1, , Cash and Bank Balance Short term loans & advances &Other Current Assets 1, Total (A) 2, , Current Liabilities Trade Payables Other Current Liabilities Short Term Provisions Total (B) , Net Working Capital (A)-(B) 1, , Page 77 of 370

79 The details of our Company s expected working capital requirement as at March 31, 2016 is set out in the table below: (Rs. In Lakhs) Particulars (Estimated) Current Assets Inventories Trade Receivables 4, Cash and Bank Balance Short Term Loans & advances & Other Current Assets Total (A) 5, Current Liabilities Trade Payables Other Current Liabilities Short Term Provisions Total (B) Net Working Capital (A)-(B) 4, Incremental Working Capital* 1, Sources Of Working Capital Net Proceeds to be Utilized 1, Internal Accruals Fund based Borrowing** Total Source 1, *Incremental working capital is calculated by subtracting the current year net working capital from previous year net working capital ** As on date, our Company has sanctioned working capital facilities consisting of aggregate fund based limit of Rs. 4,500 lakhs. For further details regarding our working facilities, kindly refer to the Chapter titled Financial Indebtedness beginning of Page 220 of this Draft Prospectus. Assumption for working capital requirements Particulars Holding Level as of March 31, 2013 Holding Level as of March 31, 2014 Page 78 of 370 Holding Level as of March 31, 2015 (In Days) Holding Level as of March 31, 2016 Current Assets Inventories* Trade Receivables Current Liabilities Trade Payables * Our inventory consists of only raw materials Our Company proposes to utilise Rs lakhs of Net Proceeds towards working capital requirements for meeting our business requirements. The incremental working capital requirements are based on historical Company data, provisional data for the Financial Year and estimation of the future requirements in Financial Year considering the growth in activities of our Company. Our Company has assumed inventory of raw material of 5days for the Financial Year

80 Our Debtors cycle is of about 36 and 68 days in Financial Year and (based on provisional data). We have assumed that our debtor s cycle will be 91days for Financial Year Similarly we have estimated other current assets, current liabilities and short term provisions in line with working capital employed (based on provisional data ) in Financial Year Justification for Holding Period levels The justifications for the holding levels mentioned in the table above are provided below: Assets- Current Assets Inventories Trade receivables Liabilities Current Liabilities Trade Payables 2. General Corporate Purpose Our Company is engaged in farming of shrimps viz. white shrimps and tiger shrimps. In addition to shrimp farming, our Company also deals in products used for aquaculture of shrimps such as shrimp seeds, feeds, probiotics and others. Shrimp being a live product requires cold storage and warehousing facilities to store the same. Currently, we do not store the shrimps as we do have warehousing facility. Hence we do not maintain inventory of shrimps and sell them as and when they are farmed. The inventories appearing in our financials is of the raw material used in our business process i.e. seeds, feeds and probiotics which is maintained as per the business requirements. Our trade receivables holding period is expected to increase from around 1 month in Fiscal 2014 to around 2 month in Fiscal 2015 and around 3 months in Fiscal This increase is due to our increase in satellite farming operations wherein we generally provide a higher credit to the farmers. The increase in debtor days is also attributable to our planned increase in business operations as well. Our trade payables days are maintained in the range of days. We have forecasted the same accordingly in our estimations for Fiscal 2015 and Fiscal Our Company intends to deploy the balance Net Proceeds aggregating Rs Lakhs, towards the general corporate purposes, including but not restricted to strategic initiatives, entering into strategic alliances, partnerships, joint ventures etc. and meeting exigencies and contingencies for projects, financing normal capital expenditure, expanding into new geographies, pre-operative expenses, brand building exercise, funding routine working capital, and strengthening our marketing capabilities which our Company in the ordinary course of business may not foresee, or any other purposes as approved by our Board of Directors. Our management, in response to the dynamic nature of the Aquaculture industry, will have the discretion to revise its business plan from time to time and consequently our funding requirement and deployment of funds may also change. This may also include rescheduling the proposed utilization of Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilization of Net Proceeds. Our management, in accordance with the policies of our Board, will have flexibility in utilizing the proceeds earmarked for general corporate purposes. 3. Issue Related Expenses The expenses for this Issue include issue management fees, underwriting fees, registrar fees, legal advisor fees, printing and distribution expenses, advertisement expenses, depository charges and Page 79 of 370

81 listing fees to the Stock Exchange, among others. The total expenses for this Issue are estimated not to exceed Rs Lakhs. Expenses Expenses (Rs. in Lakhs)* Expenses (% of total Issue expenses) Expenses (% of Issue size) Payment to Merchant Banker including expenses towards printing, advertising, and payment to other intermediaries such as Registrars, Bankers etc % 2.17% Regulatory fees % 0.36% Marketing and Other Expenses % 1.08% Total estimated Issue expenses % 3.61% *As on date of the Draft Prospectus, Company has incurred Rs. [ ] Lakhs towards Issue Expenses. BRIDGE FINANCING We have not entered into any bridge finance arrangements that will be repaid from the Net Proceeds of the Issue. However, we may draw down such amounts, as may be required, from an overdraft arrangement / cash credit facility with our lenders, to finance additional working capital needs until the completion of the Issue. Any amount that is drawn down from the overdraft arrangement / cash credit facility during this period to finance additional working capital needs will be repaid from the Net Proceeds of the Issue. DEPLOYMENT OF FUNDS As estimated by our management, the entire proceeds from the Issue shall be utilized as follows: (Rs. in Lakhs) Particulars Total Funds Amount incurred Deployment during required till [ ], 2015 FY Working Capital Requirements 1, General Corporate Purpose Issue Expenses [ ] [ ] Total [ ] [ ] M/s. [ ], Chartered Accountants have vide certificate dated [ ], confirmed that as on [ ] following funds were deployed for the proposed Objects of the Issue: Internal Accruals Total Particulars (Rs. in Lakhs) Estimated Amount [ ] [ ] APPRAISAL BY APPRAISING AGENCY The fund requirement and deployment is based on internal management estimates and has not been appraised by any bank or financial institution. INTERIM USE OF FUNDS Pending utilization for the purposes described above, we intend to invest the funds in high quality interest bearing liquid instruments including money market mutual funds, deposits with banks, for the Page 80 of 370

82 necessary duration or for reducing overdrafts. Our management, in accordance with the policies established by our Board of Directors from time to time, will deploy the Net Proceeds. MONITORING UTILIZATION OF FUNDS As the Net Proceeds of the Issue will be less than Rs. 50,000 Lakhs, under the SEBI (ICDR) Regulations it is not mandatory for us to appoint a monitoring agency. Our Board and the management will monitor the utilization of the Net Proceeds through its Audit Committee. Pursuant to Clause 52 of the SME Listing Agreement, our Company shall on half-yearly basis disclose to the Audit Committee the applications of the proceeds of the Issue. On an annual basis, our Company shall prepare a statement of funds utilized for purposes other than stated in this Draft Prospectus and place it before the Audit Committee. Such disclosures shall be made only until such time that all the proceeds of the Issue have been utilized in full. The statement will be certified by the Statutory Auditors of our Company. VARIATION IN OBJECTS In accordance with Section 27 of the Companies Act, 2013, our Company shall not vary the objects of the Issue without our Company being authorised to do so by our shareholders by way of a special resolution. In addition, the notice issued to our shareholders in relation to the passing of such special resolution shall specify the prescribed details as required under the Companies Act and shall be published in accordance with the Companies Act and the rules thereunder. As per the current provisions of the Companies Act, our Promoters or controlling shareholders would be required to provide an exit opportunity to such shareholders who do not agree to the proposal to vary the objects, at such price, and in such manner, as may be prescribed by SEBI, in this regard. OTHER CONFIRMATIONS No part of the Issue proceeds will be paid by our Company as consideration to the Promoters, the Directors, our key management personnel or the Group Companies, except in the ordinary course of business. Page 81 of 370

83 BASIS FOR ISSUE PRICE Zeal Aqua Limited Draft Prospectus The Issue Price of Rs. 122 per Equity Share has been determined by our Company, in consultation with the Lead Manager on the basis of the following qualitative and quantitative factors. The face value of the Equity Share is Rs. 10 and Issue Price is Rs. 122 per Equity Share and is 12.2 times the face value. QUALITATIVE FACTORS Some of the qualitative factors, which form the basis for computing the price, are: High quality shrimps Experience and knowledge of Promoters in our sector. Effective bio-security measures State of Art Infrastructure For further details, refer to heading Our Competitive Strengths under chapter titled Our Business beginning on page 110 of this Draft Prospectus. QUANTITATIVE FACTORS The information presented below relating to the Company is based on the restated financial statements of the Company for Financial Year 2012, 2013 and 2014 prepared in accordance with Indian GAAP. On March 25, 2015, the shareholders of our Company approved a bonus issue of 11,50,200 equity shares of Rs 10 each in the ratio of 3 equity shares for every 5 shares held as on March 25, Some of the quantitative factors, which form the basis for computing the price, are as follows: 1. Basic and Diluted Earnings per Share (EPS) as per Accounting Standard 20 Year ended EPS (Rs.) Pre Bonus EPS (Rs.) Post Bonus Weight March 31, March 31, March 31, Weighted Average The Basic and Diluted Post Bonus EPS for the period ended December 31, 2014 was Rs (not annualized) Note: EPS calculation has been done in accordance with Accounting standard 20- Earning Per Share issued by the institute of Chartered Accountants of India Weighted average number of equity is the number of equity shares outstanding at the beginning of the year/period adjusted by the number of equity shares issued during the year/ period multiplied by the time weighting factor. The time weighting factor is the number of days for which specific shares are outstanding as a proportion of total number of days. Post bonus EPS has been calculated after adjusting the bonus issue made on March 25, Page 82 of 370

84 2. Price to Earnings (P/E) ratio in relation to Issue Price of Rs. 122 per Equity Share of Rs. 10 each. Particulars Pre Bonus P/E Post Bonus P/E Ratio Ratio P/E ratio based on Basic EPS for FY P/E ratio based on Weighted Average EPS *Industry P/E 11.4 * As on date our relevant industry with peers of comparable size, comprises only M/s. Waterbase. Limited 3. Average Return on Net worth (RoNW) Return on Net Worth ( RoNW ) as per restated financial statements Year ended RoNW (%) Weight March 31, March 31, March 31, Weighted Average The return on Net worth for period ended December 31, 2014 was % (not annualized) Note: The RoNW has been computed by dividing net profit after tax as restated, by Net Worth as at the end of the year as restated 4. Minimum Return on Total Net Worth post Issue needed to maintain Post Bonus Pre Issue EPS of Rs for the year ended March 31, 2014 is 16.64% respectively. 5. Net Asset Value (NAV) Amt. (Rs.) Particulars Pre Bonus Post Bonus Net Asset Value per Equity Share as of March 31, Net Asset Value per Equity Share after the Issue Issue Price per equity share NAV per equity share has been calculated as net worth divided by total number of equity shares outstanding at the end of the year. Page 83 of 370

85 6. Comparison with other listed companies Companies CMP EPS PE Ratio RONW % Zeal Aqua Limited Peer Group* Waterbase Limited * Source: Zeal Aqua Limited Draft Prospectus NAV (Per Share) Face Value Total Revenue (In Crores) ** % % ** CMP for our Company is considered at Issue Price Notes: Considering the nature of business of the Company the peers available are not strictly comparable. However the same have been included for broad comparison. The figures for Zeal Aqua Limited are based on the restated results for the year ended March 31, The figures for the peer group are based on standalone audited results for the respective year ended March 31, Current Market Price (CMP) is the closing prices of respective scripts as on April 1, 2015 The face value of each Equity Share is Rs. 10/-. Bonus shares issued on March 25, 2015, has been counted for the calculation of weighted average number of shares in this Chapter. *Important Note The restated financials did not consider the issue of bonus shares made in March Hence, where post bonus calculations are given the restated figures have been adjusted to that effect. The Issue Price of Rs. 122 per Equity Share has been determined by the Company in consultation with the LM and is justified based on the above accounting ratios. For further details see section titled Risk Factors beginning on page 13 and the financials of the Company including profitability and return ratios, as set out in the section titled Financial Statements beginning on page 173 of this Draft Prospectus for a more informed view. Page 84 of 370

86 To The Board of Directors, Zeal Aqua Limited Surat STATEMENT OF POSSIBLE TAX BENEFITS Zeal Aqua Limited Draft Prospectus Dear Sirs, Sub: Statement of possible tax benefits available to the Company and its shareholders on proposed Public Issue of Shares under the existing tax laws We hereby confirm that the enclosed annexure, prepared by the Management of Zeal Aqua Limited ( the Company ), states the possible tax benefits available to the Company and the shareholders of the Company under the Income - Tax Act, 1961 ( Act ), Wealth Tax Act, 1957, and state VAT Legislation presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions which, based on business imperatives which the Company may face in the future, the Company may or may not fulfil. The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. A shareholder is advised to consult his/ her/ its own tax consultant with respect to the tax implications arising out of his/her/its participation in the proposed issue, particularly in view of ever changing tax laws in India. We do not express any opinion or provide any assurance as to whether: the Company or its shareholders will continue to obtain these benefits in future; or the conditions prescribed for availing the benefits have been/would be met. The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and the provisions of the tax laws. The same shall be subject to notes to this annexure. *No assurance is given that the revenue authorities / courts will concur with the views expressed herein. The views are based on the existing provisions of law and its interpretation, which are subject to change from time to time. We would not assume responsibility to update the view, consequence to such change. We shall not be liable to Zeal Aqua Limited for any claims, liabilities or expenses relating to this assignment except to the extent of fees relating to this assignment, as finally judicially determined to have resulted primarily from bad faith of intentional misconduct. For Pary & Co. Chartered Accountants Firm Registration No C Sd/- (CA Akash Gaglani) Partner Membership No Date: April 9, 2015 Place: Surat Page 85 of 370

87 ANNEXURE TO THE STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO ZEAL AQUA LIMITED AND ITS SHAREHOLDERS Outlined below are the possible benefits available to the Company and its shareholders under the current direct tax laws in India for the Financial Year BENEFITS TO THE COMPANY UNDER THE INCOME TAX ACT, 1961 (THE ACT ) 1. General tax benefits A. Business Income The Company is entitled to claim depreciation on specified tangible and intangible assets owned by it and used for the purpose of its business as per provisions of Section 32 of the Act. Business losses, if any, for an assessment year can be carried forward and set off against business profits for eight subsequent years. Unabsorbed depreciation, if any, for an assessment year can be carried forward and set off against any source of income in subsequent years as per provisions of Section 32 of the Act. B. MAT Credit As per provisions of Section 115JAA of the Act, the Company is eligible to claim credit for Minimum Alternate Tax ( MAT ) paid for any assessment year commencing on or after April 1, 2006 against normal income-tax payable in subsequent assessment years. As per Section 115JB, Minimum Alternate Tax ( MAT ) is of the Book profits computed in accordance with the provisions of this section, where income-tax computed under the normal provisions of the Act is less than 18.5% of the Book profits as computed under the said section. A surcharge on income tax of 5% would be levied if the total income exceeds Rs.10 million but does not exceed Rs 100 million. A surcharge at the rate of 10% would be levied if the total income exceeds Rs 100 million. Education cess of 2% and Secondary Higher Education cess of 1% is levied on the amount of tax and surcharge. MAT credit shall be allowed for any assessment year to the extent of difference between the tax payable as per the normal provisions of the Act and the tax paid under Section 115JB for that assessment year. Such MAT credit is available for set-off up to ten years succeeding the assessment year in which the MAT credit arises. C. Capital Gains (i) Computation of capital gains Capital assets are to be categorized into short - term capital assets and long term capital assets based on the period of holding. All capital assets, being shares held in a Company or any other security listed in a recognized stock exchange in India or unit of the Unit Trust of India or a unit of a mutual fund specified under section 10(23D) of the Act or a zero coupon bond, held by an assessee for more than twelve months are considered to be long - term capital assets, capital gains arising from the transfer of which are termed as long - term capital gains ( LTCG ). In respect of any other capital assets, the holding period should exceed thirty - six months to be considered as long - term capital assets. Short - term capital gains ( STCG ) means capital gains arising from the transfer of capital asset being a share held in a Company or any other security listed in a recognized stock exchange in India or unit of the Unit Trust of India or a unit of a mutual fund specified under clause (23D) of Section 10 or a zero coupon bonds, held by an assessee for twelve months or less. In respect of any other capital assets, STCG means capital gains arising from the transfer of an asset, held by an assessee for thirty six months or less. Page 86 of 370

88 Page 87 of 370 Zeal Aqua Limited Draft Prospectus LTCG arising on transfer of equity shares of a Company or units of an equity oriented fund (as defined which has been set up under a scheme of a mutual fund specified under Section 10(23D) is exempt from tax as per provisions of Section 10(38) of the Act, provided the transaction is chargeable to securities transaction tax (STT) and subject to conditions specified in that section. Income by way of LTCG exempt under Section 10(38) of the Act is to be taken into account while determining book profits in accordance with provisions of Section 115JB of the Act. As per provisions of Section 48 of the Act, LTCG arising on transfer of capital assets, other than bonds and debentures (excluding capital indexed bonds issued by the Government) and depreciable assets, is computed by deducting the indexed cost of acquisition and indexed cost of improvement from the full value of consideration. As per provisions of Section 112 of the Act, LTCG not exempt under Section 10(38) of the Act are subject to tax at the rate of 20% with indexation benefits. However, if such tax payable on transfer of listed securities or units or zero coupon bonds exceed 10% of the LTCG (without indexation benefit), the excess tax shall be ignored for the purpose of computing the tax payable by the assessee. As per provisions of Section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented mutual fund (as defined which has been set up under a scheme of a mutual fund specified under Section 10(23D)), are subject to tax at the rate of 15% provided the transaction is chargeable to STT. No deduction under Chapter VIA is allowed from such income. STCG arising on sale of equity shares or units of equity oriented mutual fund (as defined which has been set up under a scheme of a mutual fund specified under Section 10(23D), where such transaction is not chargeable to STT is taxable at the rate of 30%. As per provisions of Section 71 read with Section 74 of the Act, short - term capital loss arising during a year is allowed to be set-off against short - term as well as long - term capital gains. Balance loss, if any, shall be carried forward and set-off against any capital gains arising during subsequent eight assessment years. As per provisions of Section 71 read with Section 74 of the Act, long - term capital loss arising during a year is allowed to be set-off only against long - term capital gains. Balance loss, if any, shall be carried forward and set-off against long term capital gains arising during subsequent eight assessment years. (ii) Exemption of capital gains from income tax Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets [other than those exempt u/s 10(38)] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain are invested within a period of six months from the date of transfer in the bonds redeemable after three years and issued by -: 1. National Highway Authority of India (NHAI) constituted under Section 3 of National Highway Authority of India Act, 1988; and 2. Rural Electrification Corporation Limited (REC), a company formed and registered under the Companies Act, Where a part of the capital gains is reinvested, the exemption is available on a proportionate basis. The maximum investment in the specified long term asset cannot exceed Rs 50,00,000 per assessee during any financial year. Where the new bonds are transferred or converted into money within three years from the date of their acquisition, the amount so exempted is taxable as capital gains in the year of transfer / conversion.

89 Zeal Aqua Limited Draft Prospectus As per provision of Section 14A of the Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income. The characterization of the gain / losses, arising from sale / transfer of shares as business income or capital gains would depend on the nature of holding and various other factors. D. Securities Transaction Tax As per provisions of Section 36(1) (xv) of the Act, STT paid in respect of the taxable securities transactions entered into in the course of the business is allowed as a deduction if the income arising from such taxable securities transactions is included in the income computed under the head Profit and gains of business or profession. Where such deduction is claimed, no further deduction in respect of the said amount is allowed while determining the income chargeable to tax as capital gains. E. Dividends As per provisions of Section 10(34) read with Section 115-O of the Act, dividend (both interim and final), if any, received by the Company on its investments in shares of another Domestic Company is exempt from tax. The Company distributing the dividend will be liable to pay dividend distribution tax at the rate of 15% (plus a surcharge of 10% on the dividend distribution tax and education cess and secondary and higher education cess of 2% and 1% respectively on the amount of dividend distribution tax and surcharge thereon) on the total amount distributed as dividend. However, effective from 1st October, 2014 dividend distribution tax would be paid after grossing up the net distributed profits by the company. As per the provisions of Section 115BBD of the Act, dividend received by Indian company from a specified foreign company (in which it has shareholding of 26% or more) would be taxable at the concessional rate of 15% on gross basis (plus surcharge and education cess). BENEFITS TO THE RESIDENT MEMBERS / SHAREHOLDERS OF THE COMPANY UNDER THE ACT A. Dividends exempt under section 10(34) of the Act As per provisions of Section 10(34) of the Act, dividend (both interim and final), if any, received by the resident members / shareholders from the Company is exempt from tax. The Company distributing the dividend will be liable to pay dividend distribution tax at the rate of 15% (plus a surcharge of 10% on the dividend distribution tax and education cess and secondary and higher education cess of 2% and 1% respectively on the amount of dividend distribution tax and surcharge thereon) on the total amount distributed as dividend. However, effective from 1st October, 2014 dividend distribution tax would be paid after grossing up the net distributed profits by the company. B. Capital Gains (i) Computation of capital gains Capital assets are to be categorized into short - term capital assets and long - term capital assets based on the period of holding. All capital assets, being shares held in a Company or any other security listed in a recognized stock exchange in India or unit of the Unit Trust of India or a unit of a mutual fund specified under section 10(23D) of the Act or a zero coupon bond, held by an assessee for more than twelve months are considered to be long - term capital assets, capital gains arising from the transfer of which are termed as LTCG. In respect of any other capital assets, the holding period should exceed thirty six months to be considered as long - term capital assets. STCG means capital gains arising from the transfer of capital asset being a share held in a Company or any other security listed in a recognized stock exchange in India or unit of the Page 88 of 370

90 Unit Trust of India or a unit of a mutual fund specified under clause (23D) of Section 10 or a zero coupon bonds, held by an assesse for twelve months or less. In respect of any other capital assets, STCG means capital gain arising from the transfer of an asset, held by an assesse for thirty six months or less. LTCG arising on transfer of equity shares of a Company or units of an equity oriented fund (as defined which has been set up under a scheme of a mutual fund specified under Section 10(23D)) is exempt from tax as per provisions of Section 10(38) of the Act, provided the transaction is chargeable to STT and subject to conditions specified in that section. As per first proviso to Section 48 of the Act, the capital gains arising on transfer of share of an Indian Company need to be computed by converting the cost of acquisition, expenditure incurred in connection with such transfer and full value of the consideration receiving or accruing as a result of the transfer, into the same foreign currency in which the shares were originally purchased. The resultant gains thereafter need to be reconverted into Indian currency. The conversion needs to be at the prescribed rates prevailing on dates stipulated. Further, the benefit of indexation as provided in second proviso to Section 48 is not available to non-resident shareholders. As per provisions of Section 112 of the Act, LTCG not exempt under Section 10(38) of the Act are subject to tax at the rate of 20% (plus applicable surcharge and cess) with indexation benefits. However, if such tax payable on transfer of listed securities or units or zero coupon bonds exceed 10% of the LTCG (without indexation benefit), the excess tax shall be ignored for the purpose of computing the tax payable by the assessee. As per provisions of Section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented mutual fund (as defined which has been set up under a scheme of a mutual fund specified under Section 10(23D)), are subject to tax at the rate of 15% (plus applicable surcharge and cess) provided the transaction is chargeable to STT. No deduction under Chapter VIA is allowed from such income. STCG arising on sale of equity shares or units of equity oriented mutual fund (as defined which has been set up under a scheme of a mutual fund specified under Section 10(23D)), where such transaction is not chargeable to STT is taxable at the rate of 30%. As per provisions of Section 71 read with Section 74 of the Act, short - term capital loss arising during a year is allowed to be set-off against short - term as well as long term capital gains. Balance loss, if any, shall be carried forward and set-off against any capital gains arising during subsequent eight assessment years. As per provisions of Section 71 read with Section 74 of the Act, long - term capital loss arising during a year is allowed to be set-off only against long - term capital gains. Balance loss, if any, shall be carried forward and set-off against long - term capital gains arising during subsequent 8 assessment years. (ii) Exemption of capital gains arising from income tax As per Section 54EC of the Act, capital gains arising from the transfer of a long term capital asset are exempt from capital gains tax if such capital gains are invested within a period of six months after the date of such transfer in specified bonds issued by NHAI and REC and subject to the conditions specified therein. Where a part of the capital gains is reinvested, the exemption is available on a proportionate basis. The maximum investment in the specified long - term asset cannot exceed Rs 5,000,000 per assessee during any financial year. Where the new bonds are transferred or converted into money within three years from the date of their acquisition, the amount so exempted is taxable as capital gains in the year of transfer / conversion. As per provisions of Section 14A of the Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income. Page 89 of 370

91 Page 90 of 370 Zeal Aqua Limited Draft Prospectus The characterization of the gain / losses, arising from sale / transfer of shares as business income or capital gains would depend on the nature of holding and various other factors. In addition to the same, some benefits are also available to a resident shareholder being an individual or Hindu Undivided Family ( HUF ). As per provisions of Section 54F of the Act, LTCG arising from transfer of shares is exempt from tax if the net consideration from such transfer is utilized within a period of one year before, or two years after the date of transfer, for purchase of a new residential house, or for construction of residential house within three years from the date of transfer and subject to conditions and to the extent specified therein. C. Tax Treaty Benefits As per provisions of Section 90 (2) of the Act, non-resident shareholders can opt to be taxed in India as per the provisions of the Act or the double taxation avoidance agreement entered into by the Government of India with the country of residence of the non-resident shareholder, whichever is more beneficial. D. Non-Resident Taxation Special provisions in case of Non-Resident Indian ( NRI ) in respect of income / LTCG from specified foreign exchange assets under Chapter XII-A of the Act are as follows: NRI means a citizen of India or a person of Indian origin who is not a resident. A person is deemed to be of Indian origin if he, or either of his parents or any of his grandparents, were born in undivided India. Specified foreign exchange assets include shares of an Indian company which are acquired / purchased / subscribed by NRI in convertible foreign exchange. As per provisions of Section 115E of the Act, LTCG arising to a NRI from transfer of specified foreign exchange assets is taxable at the rate of 10% (plus education cess and secondary & higher education cess of 2% and 1% respectively). As per provisions of Section 115E of the Act, income (other than dividend which is exempt under Section 10(34)) from investments and LTCG (other than gain exempt under Section 10(38)) from assets (other than specified foreign exchange assets) arising to a NRI is taxable at the rate of 20% (education cess and secondary & higher education cess of 2% and 1% respectively). No deduction is allowed from such income in respect of any expenditure or allowance or deductions under Chapter VI-A of the Act. As per provisions of Section 115F of the Act, LTCG arising to a NRI on transfer of a foreign exchange asset is exempt from tax if the net consideration from such transfer is invested in the specified assets or savings certificates within six months from the date of such transfer, subject to the extent and conditions specified in that section. As per provisions of Section 115G of the Act, where the total income of a NRI consists only of income / LTCG from such foreign exchange asset / specified asset and tax thereon has been deducted at source in accordance with the Act, the NRI is not required to file a return of income. As per provisions of Section 115H of the Act, where a person who is a NRI in any previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year, he / she may furnish a declaration in writing to the assessing officer, along with his / her return of income under Section 139 of the Act for the assessment year in which he / she is first assessable as a resident, to the effect that the provisions of the Chapter XII-A shall continue to apply to him / her in relation to investment income derived from the specified assets for that year and subsequent years until such assets are transferred or converted into money. As per provisions of Section 115I of the Act, a NRI can opt not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing return of income for that assessment year under Section 139 of the Act, declaring therein that the provisions of the

92 chapter shall not apply for that assessment year. In such a situation, the other provisions of the Act shall be applicable while determining the taxable income and tax liability arising thereon. BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS ( FIIS ) UNDER THE ACT A. Dividends exempt under section 10(34) of the Act As per provisions of Section 10(34) of the Act, dividend (both interim and final), if any, received by a shareholder from a domestic Company is exempt from tax. The Company distributing the dividend will be liable to pay dividend distribution tax at the rate of 15% (plus a surcharge of 10% on the dividend distribution tax and education cess and secondary and higher education cess of 2% and 1% respectively on the amount of dividend distribution tax and surcharge thereon) on the total amount distributed as dividend. However, effective from 1st October, 2014 dividend distribution tax would be paid after grossing up the net distributed profits by the company. B. Long Term Capital Gains exempt under section 10(38) of the Act LTCG arising on sale equity shares of a company subjected to STT is exempt from tax as per provisions of Section 10(38) of the Act. It is pertinent to note that as per provisions of Section 14A of the Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income. It is pertinent to note that as per provisions of Section 14A of the Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income. C. Capital Gains As per provisions of Section 115AD of the Act, income (other than income by way of dividends referred to Section 115-O) received in respect of securities (other than units referred to in Section 115AB & certain securities & government Bonds as mentioned in section 194LD) is taxable at the rate of 20% (plus applicable surcharge and education cess and secondary & higher education cess). No deduction is allowed from such income in respect of any expenditure or allowance or deductions under Chapter VI-A of the Act. Interest on certain securities & government bonds as mentioned in section 194LD is only. As per provisions of Section 115AD of the Act, capital gains arising from transfer of securities is taxable as follows: Nature of income Rate of tax (%) LTCG on sale of equity shares not subjected to STT 10% STCG on sale of equity shares subjected to STT 15% STCG on sale of equity shares not subjected to STT 30% For corporate FIIs, the tax rates mentioned above stands increased by surcharge (as applicable) where the taxable income exceeds Rs. 10,000,000. Further, education cess and secondary and higher education cess on the total income at the rate of 2% and 1% respectively is payable by all categories of FIIs. The benefit of exemption under Section 54EC of the Act mentioned above in case of the Company is also available to FIIs. D. Securities Transaction Tax As per provisions of Section 36(1)(xv) of the Act, STT paid in respect of the taxable securities transactions entered into in the course of the business is allowed as a deduction if the income arising from such taxable securities transactions is included in the income computed under the head Profit and gains of business or profession. Where such deduction is claimed, no further deduction in respect of the said amount is allowed while determining the income chargeable to tax as capital gains. Page 91 of 370

93 E. Tax Treaty benefits Zeal Aqua Limited Draft Prospectus As per provisions of Section 90(2) of the Act, FIIs can opt to be taxed in India as per the provisions of the Act or the double taxation avoidance agreement entered into by the Government of India with the country of residence of the FII, whichever is more beneficial to them The characterization of the gain / losses, arising from sale / transfer of shares as business income or capital gains would depend on the nature of holding and various other factors BENEFITS AVAILABLE TO MUTUAL FUNDS UNDER THE ACT a) Dividend income Dividend income, if any, received by the shareholders from the investment of mutual funds in shares of a domestic Company will be exempt from tax under section 10(34) read with section 115O of the Act. b) As per provisions of Section 10(23D) of the Act, any income of mutual funds registered under the Securities and Exchange Board of India, Act, 1992 or Regulations made there under, mutual funds set up by public sector banks or public financial institutions and mutual funds authorized by the Reserve Bank of India, is exempt from income-tax, subject to the prescribed conditions. BENEFITS UNDER THE WEALTH TAX ACT, 1957 Wealth Tax Act, 1957 Wealth tax is chargeable on prescribed assets. As per provisions of Section 2(m) of the Wealth Tax Act, 1957, the Company is entitled to reduce debts owed in relation to the assets which are chargeable to wealth tax while determining the net taxable wealth. Shares in a company, held by a shareholder are not treated as an asset within the meaning of Section 2(ea) of the Wealth Tax Act, 1957 and hence, wealth tax is not applicable on shares held in a company. TAX BENEFITS UNDER THE STATE VAT LEGISLATIONS The benefits under VAT are qua goods and differ from State to State. Hence, we are covering only those States wherein the Company is having prominent presence in respect of Exempted Commodities as on date. The product Zeal Aqua Limited mainly deals is shrimps and is included in entry no. 24 of Schedule-1 of VAT Act, 2003 and thus the Company is exempted from payment of VAT on the sale of these products. Note: All the above benefits are as per the current tax laws and will be available only to the sole / first name holder where the shares are held by joint holders. For Pary & Co. Chartered Accountants Firm Registration No C Sd/- (CA Akash Gaglani) Partner Membership No Date: April 9, 2015 Place: Surat Page 92 of 370

94 SECTION IV ABOUT THE COMPANY OUR INDUSTRY Zeal Aqua Limited Draft Prospectus The information in this section includes extracts from publicly available information, data and statistics and has been derived from various government publications. Neither we nor any other person connected with the Issue have verified this information. The data may have been re-classified by us for the purposes of presentation. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be based on such information. You should read the entire Draft Prospectus, including the information contained in the sections titled Risk Factors and Financial Statements and related notes beginning on page 13 and 173 respectively of this Draft Prospectus before deciding to invest in our Equity Shares. APPROACH TO AQUACULTURE INDUSTRY Aquaculture continues to be the fastest growing animal food-producing Industry Aquaculture also known as aqua farming is the farming of aquatic organisms including fish, molluscs, shrimps/prawns and aquatic plants. Farming implies some form of intervention in the rearing process to enhance production, such as regular stocking, feeding, protection from predators, etc. Farming also implies individual or corporate ownership of the stock being cultivated. For statistical purposes, aquatic organisms which are harvested by an individual or corporate body which has owned them throughout their rearing period contribute to aquaculture while aquatic organisms which are exploitable by public as a common property resource, with or without appropriate licences, are the harvest of fisheries World Aquaculture production in 2012 was million tonnes including million tonnes of food fish, million tonnes of aquatic algae (mostly marine macro algae/ seaweeds), and 22.4 thousand tonnes of non food products ( pearls & shells etc.). On global average, aquaculture supplied 9.41 of food fish per person for consumption in However, production distribution is extremely uneven across the globe and on all continents owing to the imbalance development. Source: - Food and Agriculture Organization of the United Nations FISH FARMING MOLLUSC S I.E OYSTER FARMING AQUACULTURE SHRIMP/P RAWN FARMING OTHER (ECHINOD ERMS& JE LLYFISH. ) Page 93 of 370

95 An appropriate view on Aquaculture industry, then, calls for the overall economy outlook, performance and expectations of Fisheries sector, position of Fisheries and micro analysis. OVERVIEW OF INDIAN ECONOMY India is set to become the world s fastest-growing major economy by 2016 ahead of China, the International Monetary Fund (IMF) said in its recent latest forecast. India is expected to grow at 6.3 per cent in 2015, and 6.5 per cent in 2016 by when it is likely to cross China's projected growth rate, the IMF said in the latest update of its World Economic Outlook. India's macro-economic prospects have strengthened and the country is best positioned among emerging market economies, gaining global investor's attention, says a report by ICICI Bank. The improvement in India s economic fundamentals has accelerated in FY2015 with the combined impact of a strong Government mandate, RBI's inflation focus supported by benign global commodity prices. Source: Outlook for Growth In the coming year, real GDP growth at market prices is estimated to be about percentage points higher vis-a-vis This increase is warranted by four factors. First, the government has undertaken a number of reforms and is planning several more. Cumulative growth impact of these reforms will be positive. A further impetus to growth will be provided by declining oil prices and increasing monetary easing facilitated by on-going moderation in inflation. Simulating the effects of tax cuts, declining oil prices will add spending power to households, thereby boosting consumption and growth. Oil is also a significant input in production, and declining prices will shore up profit margins and hence balance sheets of the corporate sector. Declining input costs are reflected in the wholesale price index which moved to deflation territory in January Page 94 of 370

96 Further decline in inflation and the resulting monetary easing will provide policy support for growth both by encouraging household spending in interest-sensitive sectors and reducing the debt burden of firms, strengthening their balance sheets. The final favourable impulse will be the monsoon which is forecast to be normal compared to last year. Using the new estimate for as the base, this implies growth at market prices of percent in The power of growth to lift all boats will depend critically on its employment creation potential. Source Economic Survey ; indiabudget.nic.in Outlook for Reforms In the months ahead, several reforms will help boost investment and growth. The budget should continue the process of fiscal consolidation, embedding actions in a medium-term framework. India s overall revenue-to-gdp ratio (for the general government) for 2014 is estimated at 19.5 percent by the IMF. This needs to move toward levels in comparator countries estimated at 25 percent for emerging Asian economies and 29 percent for the emerging market countries in the G-20. Since assuming office in May 2014, the new government has undertaken a number of new reform measures whose cumulative impact could be substantial. Fiscal Framework Notwithstanding the challenging nature of the budget, elaborated in the Mid-Year Economic Analysis , the Government will adhere to the fiscal target of 4.1 per cent of GDP. Despite weakness in revenue collection and delayed disinvestment, new excises on diesel and petrol (revenue yield of about 20,000 crores), reduced subsidies, and expenditure compression will ensure the commitment to discipline. India can reconcile the requirements of fiscal consolidation and the imperative of boosting public investment to revive growth and crowd-in private investment provided the right lessons are learnt. Since this is the first full budget of the new government, and especially in light of the far-reaching recommendations of the Fourteenth Finance Commission, the time is ripe for reviewing the medium-term framework and setting targets for the upcoming year against that background and taking account of the lessons of recent history. Three phases marked recent fiscal history. a. At first rapid growth improved all fiscal aggregates, flows and stocks. But failure to control expenditure, especially revenue expenditure, towards the end of that phase, combined with excessive counter-cyclical policies in the second phase ( ) led to a loss of fiscal control that contributed to the near-crisis of A casualty has been low and stagnating capital expenditure. In the third phase (2013-today), a modicum of fiscal stability has been restored. This history suggests the following strategy going forward. First, in the medium term, India must meet its medium-term target of 3 percent of GDP. This will provide the fiscal space to insure against future shocks and also to move closer to the fiscal performance of its emerging market peers. It must also reverse the trajectory of recent years and move toward the golden rule of eliminating revenue deficits and ensuring that, over the cycle, borrowing is only for capital formation. b. Second, the way to achieve these targets will be expenditure control and expenditure switching from consumption to investment. And the secular decline in capital expenditure in the last decade has undermined India s long run growth potential. From , as growth gathers steam and as the GST is implemented, the consequential tax buoyancy when combined with expenditure control will ensure that medium term targets can be comfortably met. This buoyancy is assured by history because over the course of the growth surge in the last decade, the overall tax-gdp ratio increased by about 2.7 percentage points, from 9.2 percent in to 11.9 per cent in even without radical tax reform. c. Third, the medium-term commitment to discipline cannot result in an Augustinian deferment of actions. In the upcoming year, too, fiscal consolidation must continue. However, the need for accelerated fiscal consolidation has lessened because macroeconomic pressures have Page 95 of 370

97 significantly abated with the dramatic decline in inflation and turnaround in the current account deficit. Market size The government, engineering an economic rebound with a slew of reforms, has unveiled a new statistical method to calculate the national income with a broader framework that turned up a pleasant surprise: GDP in the past year grew 6.9 per cent instead of the earlier 4.7 per cent. The revision in base year of India's national accounts will increase the size of the economy to Rs trillion (US$ 1.8 trillion) in FY14, according to India Ratings. The size of the Indian economy was at about Rs trillion (US$ 1.51 trillion) in Government Initiatives India has become a promising investment destination for foreign companies looking to do business here. Mr Narendra Modi, Prime Minister of India, has launched the 'Make in India' initiative with the aim to give the Indian economy global recognition. This initiative is expected to increase the purchasing power of the common man, which would further boost demand, and hence spur development, in addition to benefiting investors. The steps taken by the government in recent times have shown positive results as India's gross domestic product (GDP) at factor cost at constant ( ) prices for Q1 of is estimated at Rs trillion (US$ billion), as against Rs trillion (US$ billion) in Q1 of , registering a growth rate of 5.7 per cent. Based on the recommendations of the Foreign Investment Promotion Board (FIPB), the Government of India has approved 14 proposals of FDI amounting to Rs 1, crore (US$ million) approximately. Out of the 14 approved proposals, six of them belonged to the pharmaceutical sector which was the highest number of approvals for any sector. Page 96 of 370

98 Road Ahead Zeal Aqua Limited Draft Prospectus The International Monetary Fund (IMF) and the World Bank in a joint report have forecasted that India will register a growth of 6.4 per cent in 2015, due to renewed confidence in the market brought about by a series of economic reforms pursued by the government. Only India is anticipated to witness better growth momentum among the BRIC bloc whereas other member countries are expected to see stable growth momentum, according to Organisation for Economic Cooperation and Development (OECD). India could become the world's seventh biggest nation in terms of private wealth, with a 150 per cent increase in total, from US$ 2 trillion in 2013 to US$ 5 trillion in 2018, as per a recent study by the Boston Consulting Group (BCG). Furthermore, the new 'Make in India' initiative is expected to be a vital component in India's quest for achieving wholesome economic development. References: Press Information Bureau (PIB), Media Reports, Department of Industrial Policy and Promotion (DIPP), Securities and Exchange Board of India (SEBI) Source: GLOBAL AQUACULTURE INDUSTRY Global fish production has grown steadily in the last five decades, with food fish supply increasing at an average annual rate of 3.2 percent, outpacing world population growth at 1.6 percent. World per capita apparent fish consumption increased from an average of 9.9 kg in the 1960s to 19.2 kg in This impressive development has been driven by a combination of population growth, rising incomes and urbanization, and facilitated by the strong expansion of Aquaculture production and more efficient distribution channels. China has been responsible for most of the growth in fish availability, owing to the dramatic expansion in its fish production, particularly from aquaculture. Its per capita apparent fish consumption also increased an average annual rate of 6.0 percent in the period to about 35.1 kg in Annual per capita fish supply in the rest of the world was about 15.4 kg in 2010 (11.4 kg in the 1960s and 13.5 kg in the 1990s).Despite the surge in annual per capita apparent fish consumption in developing regions (from 5.2 kg in 1961 to 17.8 kg in 2010) and low-income food-deficit countries (LIFDCs) (from 4.9 to 10.9 kg), developed regions still have higher levels of consumption, although the gap is narrowing. A sizeable and growing share of fish consumed in developed countries consists of imports, owing to steady demand and declining domestic fishery production. In developing countries, fish consumption tends to be based on locally and seasonally available products, with supply driving the fish chain. However, fuelled by rising domestic income and wealth, consumers in emerging economies are experiencing a diversification of the types of fish available owing to an increase in fishery imports. Source: Food and Agriculture Organization of the United Nations- Page 97 of 370

99 World capture fishers and aquaculture production Source: Food and Agriculture Organization of the United Nations- World food fish aquaculture production expanded at an average annual rate of 6.2 percent in the period (9.5 percent in ) from 32.4 million to 66.6 million tonnes. In the same period, growth was relatively faster in Africa (11.7 percent) and Latin America and the Caribbean (10 percent). Excluding China, production in the rest of Asia grew by 8.2 percent per year (4.8 percent in ). The annual growth rate in China, the largest aquaculture producer, averaged 5.5 percent in (12.7 percent in ). In 2012, production in North America was lower than in Global aquaculture production attained another all-time high of 90.4 million tonnes (live weight equivalent) in 2012 (US$144.4 billion), including 66.6 million tonnes of food fish and 23.8 million tonnes of aquatic algae, with estimates for 2013 of 70.5 million and 26.1 million tonnes, respectively. China alone produced 43.5 million tonnes of food fish and 13.5 million tonnes of aquatic algae that year. Some developed countries, e.g. the United States of America, have reduced their aquaculture output in recent years, mainly owing to competition from countries with lower production costs.an important change in trade patterns is the increased share of developing countries in fishery trade. Developing economies saw their share rise to 54 percent of total fishery exports by value in 2012, and more than 60 percent by quantity (live weight). Although developed countries continue to dominate world imports of fish and fishery products, their share has decreased. Exports from developing countries have increased significantly in recent decades also thanks to the lowering of tariffs. This trend follows the expanding membership of the World Trade Organization (WTO), the entry into force of bilateral and multilateral trade agreements, and rising disposable incomes in emerging economies. However, several factors continue to constrain developing countries in accessing international markets RECENT CHALLENGES FACED BY SHRIMP INDUSTRY The unusual supply shortage during the peak farming season in Asia, the prolonged Eurozone crisis, the weak yen the EMS (Early Mortality Syndrome) outbreak amongst Thailand Shrimp and the US ruling on the countervailing duties have all combined to bring negative impacts on the international trade for shrimp, but raw material shortage has kept shrimp prices firm worldwide. Market growth was stagnant in the two large western markets of the EU and USA, with imports in these markets at a 5-year low during the first quarter of Increased landing costs associated with the yen depreciation in Japan affected household demand for raw shrimp compared with processed shrimp. Page 98 of 370

100 Meanwhile, in Southeast Asia, stable consumer demand is keeping fresh shrimp prices high, compared with frozen products for export markets. In India, smaller sizes of fresh vannamei continue to enjoy good demand in the local market. In 2013 the USA imported nearly 2, 000 tonnes less shrimp in March 2013 compared with the same period in Cumulative imports were down 8.35% because of reduced production in Thailand and supply shortfall in Ecuador, Indonesia, Viet Nam and China during that period. However, imports increased significantly from India (+70%). The trend is similar in India, which is now possibly the second largest export processor of farmed shrimp, after Thailand. Farmed vannamei shrimp production almost doubled last year. Farmers have learnt how to balance the harvest against the market demand. Official reports estimated a production of 2,30,000 tonnes of vannamei shrimp in However, black tiger harvests have declined because of the diversification in the farmed species. Source: - FAO GLOBEFISH VARIETY OF FARMED SPECIES OF SHRIMPS Thousands of species of shrimp inhabit the brackish and marine waters of the globe. Most are rare, very small, or not suitable for human consumption. Although there are many species of shrimp and prawn, only a few of the larger ones are actually cultivated. The giant tiger shrimp (Penaeus monodon) and the western white shrimp (Penaeus vannamei) probably account for approximately 90% of the shrimp produced on farms around the world in the past few years. Western White Shrimp (Penaeus vannamei): Native to the Pacific coast of Central and South America (from Mexico to Peru), P. vannamei is the leading farm-raised species in the Western Hemisphere, representing more than 99% of production. White shrimp can be stocked at small sizes, have a uniform growth rate and reach a maximum length of 230 millimetres. They breed in captivity better than monodon, but not as readily as many of the other penaeids (below). Hatchery survivals are high, from 50% to 60%. Throughout Latin America, hatcheries maintain captive stocks of vannamei broodstock, some of them pathogenfree, some of them pathogen-resistant and some of them in captivity for 30 years. Farmers throughout Asia are switching to vannamei, and it has now become the dominant species around the world. Most of the major shrimp farming countries in Asia have established breeding centers for vannamei, and they are expected to do the same thing for monodon. Page 99 of 370

101 Giant Tiger Shrimp (Penaeus monodon): Named for its huge size and banded tail, P. monodon accounts for about a quarter of the farmed shrimp coming out of Asia. Native to the Indian Ocean and the southwestern Pacific Ocean from Japan to Australia, "tigers" are the largest (maximum length 363 millimeters) and fastest growing of the farmed shrimp. They tolerate a wide range of salinities, but shortages of wild broodstock often exist, captive breeding is difficult and hatchery survivals are low (20% to 30%). Tigers are very susceptible to two of the most lethal shrimp viruses: yellowhead and whitespot. Specific pathogen free broodstock and postlarvae began appearing on the market in 2009, primarily in Vietnam and India. Indian White Shrimp (Penaeus indicus): Indicus is raised on extensive farms throughout Southeast Asia, and it is widely cultured in India, the Middle East and eastern Africa. It tolerates low water quality better than monodon, it likes high salinities, high temperatures and high densities, and it is readily available in the wild. Indicus also spawns in ponds. Iranian shrimp farms produces more indicus than any other country. Native to the Indian Ocean from southern Africa to northern Australia and to all of Southeast Asia, indicus is one of the major species in the region's commercial fishery. It is the most important species caught off the east coast of Africa and is probably the most important commercial species in India, especially in the inshore fishery and in the rice field farming around Kerala. Page 100 of 370

102 Chinese White Shrimp (Penaeus chinensis, also known as P. orientalis): Native to the coast of China and the west coast of the Korean peninsula, Chinese white shrimp grow better in lower water temperatures (down to 16 degrees Celsius) than vannamei and monodon, tolerate muddy bottoms and very low salinities and, unlike the above species, Chinese white shrimp readily mature and spawn in ponds. On the negative side, they have a high protein requirement (40% to 60%), a small size (maximum length of 183 millimeters), and a lower meat yield (56%) than monodon (61%) and vannamei (63%). Also, chinensis appears to be more susceptible to viruses than vannamei, which is replacing it in southern China and on Hainan Island. Japanese Kuruma Shrimp (Penaeus japonicus): Native to the Indian Ocean and the Southwestern Pacific Ocean from Japan to Australia, kuruma shrimp are farmed in Japan and Australia. Live kuruma shrimp bring outrageously high prices in Japan, as high as $100 a pound! They require clean, sandy bottoms and high protein diets (55%). Markets are limited to Japan. Australia has a few farms that export japonicus to Japan. Source: - Page 101 of 370

103 INDIAN AQUACULTURE INDUSTRY Vannamei prawns Tiger Shrimp Indian banana prawn Aquaculture in India is a very important economic activity and a flourishing sector with varied resources and potentials. Only after the Indian Independence, has fisheries together with agriculture been recognized as an important sector. The vibrancy of the sector can be visualized by the 11 fold increase that India achieved in fish production in just six decades, i.e. from 0.75 million tonnes in to 9.6 million tonnes during This resulted in an unparalleled average annual growth rate of over 4.5 percent over the years which have placed the country on the forefront of global fish production, only after China. As the second largest country in aquaculture production, the share of inland fisheries and aquaculture has gone up from 46 percent in the 1980s to over 85 percent in recent years in total fish production. Freshwater aquaculture showed an overwhelming ten-fold growth from 0.37 million tonnes in 1980 to 4.03 million tonnes in 2010; with a mean annual growth rate of over 6 percent. Freshwater aquaculture contributes to over 95 percent of the total aquaculture production. The Freshwater aquaculture comprises of the culture of carp fishes, culture of catfishes (air breathing and non-air breathing), culture of freshwater prawns, culture of pangasius, and culture of tilapia. In addition, in brackishwater sector, the aquaculture includes culture of shrimp varieties mainly, the native giant tiger prawn (Penaeus monodon) and exotic white leg shrimp (Penaeus vannamei). Thus, the production of carp in freshwater and shrimps in brackish water form the bulk of major areas of aquaculture activity. The three Indian major carps, namely catla (Catla catla), rohu (Labeo rohita) and mrigal (Cirrhinus mrigala) contribute the bulk of production to the extent of 70 to 75 percent of the total fresh water fish production, followed by silver carp, grass carp, common carp, catfishes forming a second important group contributing the balance of 25 to 30 percent. It is estimated that only about 40 percent of the available area of 2.36 million hectares of ponds and tanks has been put to use and an immense scope for expansion of area exists under freshwater aquaculture The national mean production levels from still-water ponds has gone up from about 600 kg/hectare/year in 1974 to over kg/hectare/annum at present and several farmers are even demonstrating higher production levels of 8 12 tonnes/hectare/year.the technologies of induced carp breeding and polyculture in static ponds and tanks virtually revolutionized the freshwater aquaculture sector and turned the sector into a fast growing commercial sector. The developmental support provided by the Indian Government through a network of Fish Farmers' Development Agencies and Brackishwater Fish Farmers' Development Agencies and the research and development programmes of the Indian Council of Agricultural Research (ICAR) have been the principal vehicles for this revolutionary development. In addition, additional support was also provided by various state governments, host of organizations and agencies like the Marine Products Export Development Authority, financial institutions, etc. The freshwater prawn farming has received increased attention only in the last two decades due to its high consumer demand. The giant river prawn, Macrobrachium rosenbergii, the largest and fastest growing prawn species, is cultured either under monoculture or polyculture with major carps. Culture for mariculture species has been initiated in the country and is presently carried out to a limited extent for seaweeds, and mussels as a commercial activity and some fish species like seabass and cobia on an experimental basis to standardize the technology. While sustainability is being addressed, the present concern is with regard to species diversification, in spite of the fact that the country possesses several other endemic potential and cultivable medium and minor carp species having regional demand, such as, Labeo calbasu, L. fimbriatus, L.gonius, Page 102 of 370

104 L.dussumieri, L.bata, Cirrihinus cirrhosa, C.reba, Puntius sarana, P.jerdoni. Efforts are being made to standardize the technology of mass-scale seed production of these species and their inclusion as a component of conventional carp polyculture, based on their regional importance. In addition, there is contribution from cold water fisheries, although insufficient for fish basket, is of high value and low volume category with a projected volume of 1 percent. Important food fishes of cold waters are mahaseer and schizothoracids belonging to the indigenous species and trouts among the exotic varieties. India's aquaculture production basically can be classified into freshwater and brackish water production. There are 429 Fish Farmers Development Agencies (FFDA) and 39 Brackish water Fish Farmers Development Agencies (BFDAs) for promoting freshwater and coastal aquaculture. The freshwater prawn farming has received increased attention only in the last two decades due to its high consumer demand. The giant river prawn, Macrobrachium rosenbergii, the largest and fastest growing prawn species, is cultured either under monoculture or polyculture with major carps. Culture for mariculture species has been initiated in the country and is presently carried out to a limited extent for seaweeds, and mussels as a commercial activity and some fish species like seabass and cobia on an experimental basis to standardize the technology. Freshwater Aquaculture Brakish Water Aquaculture Indian Aquuculture Industry Aquaculture in India has evolved as a viable commercial farming practice from the level of traditionally backyard activity over last three decades with considerable diversification in terms of species and systems, and has been showing an impressive annual growth rate of 6-7 percent. While the carp-based freshwater aquaculture, mainly constituted by the Indian major carps, such as, catla, rohu and mrigal, has been contributing over 90 percent of the aquaculture production satisfying the domestic need, the shrimp-based coastal aquaculture contributes to only about 5 percent of the export earnings. Aquaculture in India has become an important sector that includes carps, catfishes and prawns. Lately, the Government of India has also identified catfish farming as a national priority and has emphasized on diversification of culture practices. The importance and role of shrimp farming in India s economy was realized in the early seventies, and the first Experimental Brackish water Fish Farm began in Kakdwip, West Bengal, by the Central Inland Fisheries Research Institute under the Indian Council of Agricultural Research (ICAR) in This was followed by an All-India Coordinated Research Project on Brackish water Fish Farming was started in 1975 by the ICAR with centres in West Bengal, Odisha, Andhra Pradesh, Tamilnadu, Kerala and Goa. Later, a number of development schemes were initiated by the Ministry of Agriculture of the Government of India; including setting up of Brackish water Fish Farmers Development Agencies (BFDA) in the maritime states for the development of shrimp farming. This paved way for the establishment of a number of shrimp hatcheries and farms in the coastal states in the early nineties. India witnessed a phenomenal increase in the area under shrimp farming which occurred between , and the growth rate was phenomenal till In fact, farmed shrimp production recorded over five-fold increase from 28,000 tonnes in to 1,44,346 tonnes in and operating at around 1,00,000 tonnes over the years. More than 90 percent of the shrimp farmers in India are small land holders owning less than 2 hectares. Page 103 of 370

105 Freshwater aquaculture Zeal Aqua Limited Draft Prospectus Freshwater aquaculture is based on. carp culture.it revolves around the 'polyculture' of the three Indian major carps (catla, roho labeo and mrigal carp), as well as 'composite carp culture' of the three Indian major carps with the three exotic carps (silver, grass and common carp). Standard practices in carp culture include: The stocking of carp at combined densities varies depending on the system of culture Pond fertilization with organic manures from cattle or poultry, as well as inorganic fertilizers like urea and single super phosphate. Provision of supplementary feeds mainly in the form of a mixture of rice bran/wheat bran and groundnut/mustard oilcake in equal ratio. Source: Food and Agriculture Organization of the United Nations There are more than 100 species of Freshwater prawn found in the world. There are more than 25 species found in India. Out of these 10 species are important from commercial point of view. Out of them Macrobrachium rosenbengii is the main species which is used in culture practices. This is also known as giant prawn. This can be cultured in both fresh water as well as brackish water. It is fast growing animal and farmers can culture profitably. It contains percent animal protein and has less cholesterol. It has essential amino-acids and mineral which are very important for human beings. In culture practices, the freshwater prawn has two stages i.e. Nursery Pond and Growout Pond. Fresh water prawn is stocked in nursery pond for days then it is shifted to grow-out ponds. The ponds are prepared by using manure and fertilizers. The stocking density in nursery pond is kept lakh per hectare. Feed is provided gm per kg body weight at initial stage. Check trays are used to regulate the feeding. Prawn crop becomes ready for sale with 7-8 months. The expenditure about Rs lakh per hectare and income is Rs lakh. Thus net income is Rs lakh per hectare in 8 months. Source:-Fisheries Department Haryana Page 104 of 370

106 Level-1: EXTENSIVE FRESHWATER PRAWN CULTURE Extensive culture means rearing in ponds (but also in other impoundments such as reservoirs, irrigation ponds and rice fields) which produce less than 500 kg/ha/yr of freshwater prawns. They are stocked, often from wild sources, with PL or juveniles at 1-4/m2. There is no control of water quality; the growth or mortality of the prawns is not normally monitored; supplemental feeding is not normally supplied; and organic fertilisation is rarely applied. Level-2: SEMI-INTENSIVE FRESHWATER CULTURE PRAWN Semi-intensive systems involve stocking PL or juvenile freshwater prawns (usually from hatcheries) at 4-20/m2 in ponds, and result in a range of productivity of more than 500 kg/ha/yr and less than that defined as intensive in this box. Fertilisation is used and a balanced feed ration is supplied. Predators and competitors are controlled and water quality, prawn health and growth rate are monitored. This form of culture is the most common in tropical areas. Level-3: INTENSIVE FRESHWATER PRAWN CULTURE Intensive culture refers to freshwater prawn farming in small earth or concrete ponds (up to 0.2 ha) provided with high water exchange and continuous aeration, stocked at more than 20/m2 and achieving an output of more than kg/ha/yr. Construction and maintenance costs are high and a high degree of management is required, which includes the use of a nutritionally complete feed, the elimination of predators and competitors, and strict control over all aspects of water quality.. Brackish water aquaculture Brackish water aquaculture in India is restricted to shrimp farming utilizing semi-intensive culture practices mainly with giant tiger prawn at stocking densities of million/ha. With the provision of a high protein diet, water exchange, aeration and improved health management, production levels of 4 6 tonnes/ha have been demonstrated in a production period of 4 5 months. However, the presence of white spot syndrome during drastically reduced prawn farming activity in the late 1990s. The adoption of a more cautious approach including moderate stocking densities and good management practices has helped in the revival of the sector and in sustaining shrimp production of the country. Furthermore, with the recent introduction of Penaeus vannamei, the shrimp culture is again regaining its glory of export earner at large. The brackish water aquaculture sector is mainly supported by shrimp production, as well as, the giant tiger prawn (Penaeus monodon), which is responsible for the bulk of production followed by the recently introduced whiteleg shrimp, Penaeus vannamei. In fact, the culture of this shrimp picked up on par with tiger shrimp in very short span of time. Although India possesses several other potential species of finfish and shellfish, the production of these, is still very low key. Page 105 of 370

107 State-wise details of Tiger shrimp production Sr. No. States Area (ha) Zeal Aqua Limited Draft Prospectus Total Total Production Productivity Area Production Productivity (MT) MT/ha/yr (ha) (MT) (MT/ha/yr) 1 West Bengal 48,558 45, ,410 52, Orissa 8,597 10, ,256 14, Andhra Pradesh 35,274 51, ,925 25, Tamil Nadu 5,360 12, ,293 17, Kerala 12,809 8, ,917 5, Karnataka Goa Maharashtra 1,098 1, ,047 2, Gujarat 1,971 4, ,992 6, Total 1,14,370 1,35, ,110 1,23, Source: MPEDA, Kochi - Production from Aquaculture farms RISK ANALYSIS IN AQUACULTURE The major risk associated with aquaculture; particularly with shrimp farming is that of WSD i.e. White Spot Disease. The major cause of WSD is White spot syndrome virus. (WSSV) It could occur at each stage of the cropping cycle. The risk factors at each stage of the cropping cycle and their relationship to WSD outbreaks are illustrated below in a web of disease causation The following summarize the main points shown in the web : A WSD outbreak is the end result of a series of actions or changes from healthy shrimp through to disease outbreak. At each stage of the cropping cycle, a number of factors influence the development of the disease in individual animals and also in the population of shrimp in each pond. WSSV can enter the shrimp and pond through different routes, including shrimp seed, water, carrier animals and transfer of infected animals and farm equipment from one farm to another. Adverse environmental factors combined with a high prevalence of infected shrimp among the pond population are necessary for a mass disease outbreak to occur. Page 106 of 370

108 Risk Management-Issues to be addressed to avoid WSD are as follows:- It is important to keep predators and competitors out of the pond. Initially, the pond should be filled and the water treated with calcium hypochlorite at 15 to 20 ppm active chlorine. Once the pond is filled, water exchange should be reduced to a minimum for at least the first month after stocking. It is also important to ensure that the incoming water is free from animals and has not been contaminated by wastes from other farms. Reservoir is essential for treatment of incoming water. Early detection of the problem is extremely important. The shrimp should be examined regularly for signs of disease, especially if there is an increased risk of infection. FISHERIES SECTOR-CONTRIBUTION TO ECONOMY The fisheries sector contributes to the national income, exports, food and nutritional security and employment generation. As per the estimates of the Central Statistical Organisation (CSO), of the Government of India, the value of GDP from fisheries sector at current prices during was Rs 65,541 crores, which is 4.47 per cent of the total GDP of agriculture and allied sectors. Fish contributes substantially to the domestic food security of India which has a per capita consumption of more than 6.00 kg per annum. With freshwater aquaculture being a homestead activity in several parts of the country, besides adding to the nutritional security it also helps in bringing additional income to rural households. The network of 429 FFDAs has brought about 8.05 lakh ha of water under modern fish culture operations benefiting approximately 13, 86 lakh beneficiaries. The rapid growth of the sector has generated huge employment opportunities for professional, skilled and semi-skilled workers for the different support activities such as construction and the management of farms, hatcheries, feed mills, processing units etc. It has been estimated that over 3,00,000 jobs have been generated in the brackish water sector alone in the main and supporting areas for shrimp culture, although information on exact numbers involved in aquaculture is not available. Source:- Page 107 of 370

109 TRENDS ISSUES AND DEVELOPMENT IN THE INDIAN AQUACULTURE INDUSTRY During , marine products exports reached an all-time high of Rs 18,856 crores. Marine product exports, crossed all previous records in quantity, rupee value and US$ terms. Exports aggregated to 9,28,215 tonnes valued at Rs. 18,85,626 crores and USD 3, million. Compared to the previous year, seafood exports recorded a growth of 7.68 percent in quantity, percent in rupee and 0.1 percent growth in US$ earnings, respectively. During , frozen shrimp from culture sector continued to be the major export value item accounting a share of percent of the total US$ earnings. Shrimp exports during the period increased by percent, percent and 3.56 percent in quantity, rupee value and US$ value, respectively. There was a steep drop in unit value realization of frozen shrimp at percent. Fish, has retained its prime position as the principal export item in quantity terms and the second largest export item in value terms, accounted for a share of about percent in quantity and percent in US$ earnings. Unit value realization of fish decreased by 8.79 percent. Chilled items have shown a positive growth in quantity (26.27 percent), rupee value (50.27 percent) and US$ (34.91 percent). The unit value realization also increased by 6.84 percent. Aquaculture in the past ten years has witnessed both horizontal and vertical expansion, with total production increasing from 0.37 million tonnes in 1980 to 4.43 million tonnes during , an increase of over 12 fold. Conventional farming practices using carp, as well as an increased emphasis on diversified culture of freshwater prawns and to some extent catfish, are important areas of growth in the freshwater aquaculture sector. Greater adoption of modern farming techniques and assured higher profit margins in carp culture over most other agricultural enterprises has attracted farmers to fish farming. Freshwater aquaculture has further witnessed diversification through the incorporation of high valued species like freshwater prawn and has increased its production from 455 tonnes in 1992 to over 30,000 tonnes in Aquaculture over recent years has not only led to substantial socio-economic benefits such as increased nutritional levels, income, employment and foreign exchange, but has also brought vast un-utilized and under-utilized land and water resources under culture. With freshwater aquaculture being compatible with other farming systems, it is largely environmentally friendly and provides for recycling and utilization of several types of organic wastes. Over the years, however, culture practices have undergone considerable intensification and with the possibility of obtaining high productivity levels there has been a state of flux between the different farming practices. In the brackish water sector there were issues of waste generation, conversion of agricultural land, salinization, degradation of soil and the environment due to the extensive use of drugs and chemicals, destruction of mangroves and so on. Though some of these issues posed concerns, most however, were isolated instances with the bulk of farming conforming to eco-requirements. Source:- FUTURE PROSPECTS OF AQUACULTURE The global market for Aquaculture and Fisheries is projected to reach 188 million tons by 2020, driven by surging consumption of seafood in both developed as well as developing regions and the continuous decline in natural fish stock. Globally, demand for seafood has been growing, resulting in over exploitation of natural resources and production stagnation from captured fisheries. Consumer shift towards seafood as a source of protein and increased demand for exotic fish species such as shrimp and oysters are driving growth in the global aquaculture market. In developing economies, urban aquaponics practices are gaining prominence as a means to combat malnutrition and food crisis. Expanding population, rising health consciousness among consumers and increasing disposable incomes are expected to continue driving demand for seafood products, thereby providing substantial growth opportunities for aquaculture in the coming years. The market is also expected to benefit from the rising significance of fish gelatin, increasing preference for micronutrient-rich foods like fish together with increased use of fish proteins in functional foods and supplements. Page 108 of 370

110 Sustainable seafood and organic aquaculture practices are gaining prominence, globally, led by rising awareness over environmentally harmful fishing techniques. Focus is also on increasing the area devoted to aquaculture and enhancing the productivity per unit area in existing aquaculture areas by adopting species offering higher yield such as carp, tilapia, mollusks and crustaceans. Other factors driving growth in the market include expanding population, and growing popularity of urban aquaculture and aquaponics against a backdrop of increased interest in sustainable and waste-free fish farming practices. The low per capita protein consumption in developing countries offers immense untapped opportunities for future growth. Source: Copyright - Reproduced with Permission - Page 109 of 370

111 Overview OUR BUSINESS Zeal Aqua Limited Draft Prospectus Incorporated in 2009, our Company is pioneer in aquaculture industry in the state of Gujarat. Our Company is engaged in farming of shrimps viz. white shrimps and tiger shrimps which has an enormous demand worldwide for human consumption. In addition to shrimp farming, our Company also deals in products used for aquaculture of shrimps such as shrimp seeds, feeds, probiotics and others. Driven by rich experience of more than 20 years in aquaculture, innovation and investment in R&D, our Promoters strategized to capitalize on the growing global demand of shrimps and instituted our Company under the name Zeal Aqua Private Limited in March 2009 with a vision to develop an advanced, sustained and fully integrated aquaculture system across India. Subsequently in March 2015, our Company was converted into a public limited company and its name was changed to Zeal Aqua Limited. The revolution of aquaculture industry gained momentum, with the realization of the government to make commercial use of coastal lands which could not be used for agricultural purposes. The introduction of schemes of Government to allot coastal lands for aquaculture purposes to promote this industry and generate a source of revenue for farmers motivated our Promoters to enter this industry. Our Promoters who were individually culturing shrimps joined hands in 2009 to form our Company to make the business scalable and reap the benefits of synergy. At present, our Company has 81 ponds spread over around 102 hectares of land, wherein the land is being used by our Company in accordance with collaboration agreements entered with various parties. The said collaboration agreements ensure continuity of land availability on which our Company constructs ponds. In addition to shrimp farming on own ponds, our Company is also engaged in satellite farming whereby our Company supplies inputs on credit to small farmers and buys shrimps from these farmers. We deploy our specific quality control measures and the farmers under satellite farming are required to adhere to our farming standards. The satellite farming enables companies to scale up and multiply its production without putting up physical infrastructure on its own. This flexible model of shrimp production helps our Company to efficiently manage growing demand of shrimps. Our growing operations are witnessed by our sales turnover which has scaled multifold over the years. Our Company now intends to make a forward integration and is in the process of setting up a cold storage unit with processing facilities. This shall open our avenues to international markets. This is one of our major step in developing an integrated aquaculture system. Our Company not only believes in growing in numbers, but it believes in growing technologically and in an eco-friendly manner. With the objective of enhancing productivity, quality and minimize environmental degradation our Company has taken various measures such as introduction of PE Line Ponds, use of qualitative feeds, bio-security measures such as fencing and water management among others. Our state of art infrastructure and farming practices have been recognized and has fetched us the following recognitions: CIFE award in year Bhumi Nirman Award in 2011 Fisheries excellence award by Doordarshan Best Farmers for L.Vannemai by MPEDA in 2013 We believe in qualitative production with an eco-friendly approach and have thereby developed a longcontinuing relationship with our customers. With the experience of our Promoters, technological drive, continuous research, supplier tie-ups, customer relationships, government support and industry demand for shrimps and a forward integration in pipeline, our Company aims to become largest shrimp house in India and capture global markets as well. Page 110 of 370

112 OUR PRODUCTS Our Product basket mainly consists of: Shrimps Shrimp Seeds Shrimp Feeds Probiotics & others Detailed description of the products Our Company deals in: TIGER SHRIMPS (PENAEUS MONODON) Penaeus monodon are generally dark coloured, with the carapace and abdomen transversely banded with black and white The rest of the body is variable, ranging from light brown to blue or red, while some smaller specimens show a dull red dorsal strip from the rostrum to the sixth abdominal segment. Our Company has been amongst the first producers to achieve a 20 shrimp count production, year after year in the state of Gujarat. Page 111 of 370

113 WHITE SHRIMP (L. VANNAMEI) Zeal Aqua Limited Draft Prospectus Whiteleg shrimp (Litopenaeus vannamei), also known as Pacific white shrimp, is a variety of prawn commonly caught or farmed for food. Litopenaeus vannamei grows to a maximum length of 230 millimetres (9.1 in), with a carapace length of 90 mm (3.5 in). Our Company was the one of the first to Introduce L. Vannamei Culture in Gujarat, and has been among the first to achieve a 23 Count Shrimp Production. SHRIMP SEEDS, FEEDS, PROBIOTICS & OTHERS Our Company also deals in shrimp feeds, shrimp seeds, probiotics and other aquaculture related products. Page 112 of 370

114 OUR BUSINESS PROCESS Page 113 of 370

115 Process in brief: Our Company has entered into collaboration with many third parties for usage of their land. At present we have agreements entitling us to use around 102 hectares of land. In addition to these collaborations, we have also made an application for allotment of land to the Government of Gujarat. Our business process may be broadly divided into the following steps: Pond preparation Bio security measures Water filling and management Shrimp stocking & breeding Harvesting Sale Pond Preparation Our Company prepares two types of Ponds i.e. either Earthen Ponds or PE lined Ponds. Pond preparation starts with the cleaning and removal of top soil on the land. Thereafter, the lands are dried and ploughed. After ploughing of land, land is leveled. Post leveling, the PE lining activity is undertaken in case a PE lined pond has to be prepared. Ponds are then, fertilized. Once the ponds are prepared, the Company install bio-security measures at the sites. Page 114 of 370

116 Bio-security measures Some of the bio-security measures applied by our Company are: Bird Fencing Foot Dip Hand dip Crab Fencing Water filling and water management Once bio-security measures are installed at the site, the ponds are filled with water. Our Company pumps in water from the local creeks to the reservoirs situated at the sites. Before filling the water, water filtration process is carried out. Post pond filling, we set up aerators. These aerator helps in maintaining the oxygen level in the water. Water is then checked for PH levels, salinity and chlorination levels. A proper water treatment programme is undertaken by our Company. Water treatment is followed by water culture. Page 115 of 370

117 Shrimp stocking and breeding Our Company produces two kinds of shrimps i.e. Tiger shrimps (P. monodon) and White shrimps (L.Vannamei). We procure certified and tested seeds from hatcheries. These seeds are stocked using Hapa boats. Usual stocking size is Post larve (PL) 8-9 for L.Vannamei and PL 20 for P. monodon. Thereafter water quality is monitored. Water quality monitoring is an essential part in this process. Shrimp being a live product, any changes in desired PH levels, chlorination levels, etc. may hamper the growth of the shrimps. We make constant efforts to technologically upgrade this process. We have installed aerators, auto PH level checkers, etc. for monitoring the water quality. Also we have supervisors and technicians at various sites who oversee the process on regular basis. The shrimps are then feeded with feeds. At different levels of growth of shrimps, different kinds of feeds are provided to the shrimps. To prevent the shrimps from undue diseases, probiotics are also used in the process. Page 116 of 370

118 Harvesting Post 120 days of stocking with shrimp seeds, the shrimps can be partially harvested. Before harvesting of seeds, the same is sample tested by MPEDA. Post days, the shrimps are fully harvested. One of the important quality of our shrimps, is that they are free from antibiotics. After the shrimps are fully harvested, sludge disposal is carried out. Sale of Shrimps The shrimps are weighed and sold to the processing houses. OUR AQUACULTURE FACILITY Our Company has entered into collaboration agreements with various third parties wherein, we are entitled to develop shrimp farming facilities on the premises owned by these parties against agreed consideration, subject to the terms and conditions of the respective agreements. Our Company owns around 81 ponds spread over 102 hectares of these lands in the region of Surat. Page 117 of 370

119 OUR RAW MATERIALS OUR COMPETITIVE STRENGTH 1. Ever growing demand of our products Our Company s multifold growth in the past 5 years speaks of the high demand of our products, and our growth model. Shrimp being a food item, there shall be always be a growing demand trend for our product. 2. Effective bio-security measures We have deployed effective bio-security measures to prevent the outbreak of disease amongst the shrimps and provide an environment which facilitates healthy growth of shrimps. Some of the measures include fencing of our ponds, use of aerators, water filtration, etc. 3. High product quality Our Company believes in delivering the best quality shrimps, free from all kind of antibiotics and banned substances. To maintain the quality our Company follows S.O.P (Standard Operating Procedures). Page 118 of 370

120 4. Business is customer centric Our Company focuses on attaining highest level of customer satisfaction. The progress achieved by us is largely due to our ability to address and exceed customer satisfaction. The directors of the company have years of expertise and are well acquainted with domestic markets. 5. State of art infrastructure: Our Company has invested significant resources in the development of state of art infrastructure for farming of shrimps. Our Company has invested significant resources in PE lining of ponds and bio-security measures and has developed a scalable technology system. We have also been awarded many awards for our farms quality and infrastructure. 6. Marketing strategies: We have adequate networking channels and are ready to take up challenges so as to scale new heights in India as well as in global markets. Our commitment and qualitative products have helped us penetrate the market. 7. Leveraging the experience of our Promoter: Our Promoters have a rich experience of more than 20 years in shrimp farming. With their expertise and network channels developed over the years, our Company aims to develop an advanced, sustainable and fully integrated Aquaculture system. COLLABORATIONS As on date, Our Company has entered into 17 collaboration agreements. Name of entity Place of registration * Year of incorporation Partners capital account as on 31st March, 2014 (Rs. in lakhs) Total Turnover during FY (Rs. in lakhs) Kimi Aqua Farm Surat April 01, 2007 (12.13) 5.10 S.R. Aqua Farm Surat April 01, Tapi Aqua Farm Surat January 08, Preety Aqua Farm Surat April 01, Pruthvi Aqua Farm Surat January 1, 2008 (5.40) 1.08 Agni Aqua Farm Surat January 1, Akash Aqua Farm Surat January 1, Jal Aqua Farm Surat January 1, 2008 (0.91) 1.08 Vayu Aqua Farm Surat January 1, 2008 (3.53) 1.08 Darshan Aqua Farm Surat April 1, Dinkar Aqua Farm Surat April 1, Deep Aqua Farm Surat April 1, Divy Aqua Farm Surat April 1, Dilip Aqua Farm Surat April 1, Dhaval Aqua Farm Surat April 1, 2005 (2.54) 1.53 Pink Gold Aqua Surat February 2, Page 119 of 370

121 Name of entity Place of registration * Year of incorporation Partners capital account as on 31st March, 2014 (Rs. in lakhs) Total Turnover during FY (Rs. in lakhs) Farm Lotus Aqua Farm Surat February 2, * These partnership deeds are not registered with the Registrar of Firms. The Place mentioned above is the principal place of business. UTILITIES & INFRASTRUCTURE FACILITIES Infrastructure Facilities Our registered office at Surat, Gujarat, is well equipped with computer systems, internet connectivity, other communication equipment, security and other facilities, which are required for our business operations to function smoothly. Our manufacturing facilities i.e. our ponds spread across Surat are equipped with requisite utilities and modern infrastructure facilities including the following:- Power Our Company meets is Power requirements by purchasing electricity from Dakshin Gujarat Vij Co. Limited which is around KVA. In the absence of power facilities, our Company has installed generators which run on diesels at various sites. Water Being in aquaculture industry, water is our primary resource requirement. Our Company fulfills the same by pumping the water from local creeks to the reservoirs built up on our sites. The Company has made adequate arrangement for human water consumption. EXPORT AND EXPORT OBLIGATIONS Our Company doesn t have any export obligation as we are not currently exporting any of our products. HUMAN RESOURCE We believe that our employees are key contributors to our business success. We focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and background that would be an asset for its kind of business. As on February 28, 2015 our Company has 21 employees. Our manpower is a prudent mix of the experienced and youth which gives us the dual advantage of stability and growth. Our work processes and skilled resources together with our strong management team have enabled us to successfully implement our growth plans. In addition, we engage independent contractors to provide labourers for site work. Page 120 of 370

122 Department wise break up: Department No. of employees Finance & Account Department 9 Operations (farm) Department 7 Purchase/inventory Department 4 General Management 1 BUSINESS STRATEGY Our vision is to develop and sustain the most advanced, eco-friendly and sustainable Aquaculture system across India. We aim to build an end to end shrimp house providing all the facilities i.e. from providing seeds to exporting shrimps. In line with this vision, our Company is implementing a business strategy with the following key components. Our strategy will be to focus on capitalizing on our core strengths and expanding the operations of our business. Further we are in the process of setting up an integrated cold storage facility including processing facilities. We intend to focus on our existing range of products with specific emphasis on the following factors as business and growth strategy: 1. Forward integration in business operations We are in the process of setting up of an integrated cold storage facility which shall also include processing facilities. This is one of our major step towards forward integration in business operations. With the setting up of this facility, avenues to international market shall be opened for the Company. 2. Improving functional efficiency Our Company intends to improve operating efficiencies to achieve cost reductions to have a competitive edge over the peers. We believe that this can be done through continuous process improvement, customer service and technology development. Page 121 of 370

123 3. Leveraging our market skills and relationship Leveraging our market skills and relationships is a continuous process in our organization and the skills that we impart in our people give importance to customers. We aim to do this by leveraging our marketing skills and relationships and further enhancing customer satisfaction. 4. Brand image We would continue to associate ourselves with good quality customers and execute projects to their utmost satisfaction. We are highly conscious about our brand image and intend to continue our brand building exercise by providing excellent services to the satisfaction of the customers. 5. Enhancing existing production capacity and product quality We aim at increasing our production capacity by building more ponds for producing shrimps and exploring regions of India. We believe quality service and products of global standards will be of utmost importance for customer retention and repeat-order flow. We intend to have close interaction with our customers in a bid to strengthen our relationships with them. We train our employees to consistently design and deliver client focused solutions. 6. Expand our global footprint Through a combination of increased capacities, reduced costs, wider range of products adhering to global standards, marketing initiatives, competitive pricing and more efficient use of resources, we intend to expand our global footprint and become a preferred supplier for large international retail chains and institutions in the aquaculture industry. CAPACITY AND CAPACITY UTILISATION Since our company is into farming of shrimps which is a livestock, this data cannot be produced. COMPETITION Aquaculture being a vast and global industry, we face competition from various domestic and international players. The industry is also unorganized and fragmented with many small and mediumsized companies and entities. On a regional basis, a plethora of peers compete with us in all of our geographic markets. Due to industry s fragmented nature, there is no authentic data available to our Company on total industry size and markets share of our Company vis-a-vis the competitors. END USERS Our product is sold to shrimp processing houses who in turn sell the same to food chains, restaurants, end consumers for their own consumption, etc. MARKETING The efficiency of the marketing and sales network is critical success of our Company. Our success lies in the strength of our relationship with our customers who have been associated with our Company. Our team through their vast experience and good rapport with clients owing to timely and quality delivery of service plays an instrumental role in creating and expanding a work platform for Page 122 of 370

124 our Company. To retain our customers, our team, which comprises of people with vast experience regularly interacts with them and focuses on gaining an insight into the additional needs of customers. INSURANCE We maintain insurance for standard fire and special perils policy, which provides insurance cover against loss or damage by fire, earthquake of our building located in Surat which we believe is in accordance with customary industry practices. Sl. No Type of Insurance Properties / Location covered Standard fire and special 1. perils policy with add on Our Company s building situated at Plot No. 4/5, GIDC, of earthquake (fire and Olpad, District Surat. This Policy also covers our stock. shock) 2. Burglary Policy Stock in trade: on stock of probiotics, feed and bleaching Page 123 of 370

125 LAND AND PROPERTY I. Land & Property owned by the Company Sr.No. Property Kind Description of Property Area Vendors Details Purchase Consideration (Rs.) Date of Purchase Title 1 Freehold Property Block No. 868, Tal: Olpad, District: Surat 1387 Sq. ft. Naem Nasirbhai Shaikh Rs. 12,50,000 November 19, 2014 Clear II. Land and Properties taken on Lease by the Company. Sr. No. Location of the Property Document Date Licensor/ Lessor Consideration / license fee / Rent (In Rs.) Lease/License Period From To Purpose 1* Plot No. 4 and 5, GIDC, Olpad, District - Surat. December 15, 2011 Gujarat Industrial Development Corporation Total consideration of Rs. 99,125/- (Rupees Ninety Nine Thousand one Hundred Twenty Five only) as allotment price at yearly rent of Re. 1 (Rupee One). Lease is for a period of 99 years with effect from 8th October, 2002 with an option to renew the same for further period of 99 years. To carry aquaculture business. out Page 124 of 370

126 *The said property was assigned from M/s Madhukanta G. Parmar to M/s Zeal Aqua Limited by executing a Deed on June 29, 2011 against a consideration of Rs. 3,11,000 (Rupees Three Lakhs Eleven Thousand Only) which was registered on June 29, Subsequently, a Supplementary Agreement was executed on October 21, 2011 between Gujarat Industrial Development Corporation, M/s Madhukanta G. Parmar & M/s Zeal Aqua Limited. The plot was transferred on October 21, 2011 which was confirmed by office of the Regional Manager, Surat vide Letter No. GIDC /R.M./SRT./6695 dated October 21, Page 125 of 370

127 INTELLECTUAL PROPERTY Our logo is in the process of registration with the trademark authorities. We have applied for registration of our logo under the Trademark Act vides application dated August 12, 2014 and our application is in the process with the Registrar of Trademark. The detail of trademark application is as under: Sl. No. Trademark Name Application No. Class Date of application 1 Zeal August 12, 2014 We have also applied for issuance of copyright certificate for the artistic work in our logo. Page 126 of 370

128 KEY INDUSTRY REGULATIONS AND POLICIES The following description is a summary of the relevant regulations and policies as prescribed by the Government of India and other regulatory bodies that are applicable to our business. The information detailed in this chapter has been obtained from various legislations, including rules and regulations promulgated by the regulatory bodies that are available in the public domain. The regulations and policies set out below may not be exhaustive, and are only intended to provide general information to the investors and are neither designed nor intended to be a substitute for professional advice. The Company may be required to obtain licenses and approvals depending upon the prevailing laws and regulations as applicable. For details of such approvals, please see Government and other Statutory Approvals. ABOUR RELATED LEGISLATIONS 1. Employees Provident Fund and Miscellaneous Provisions Act, 1952 Under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 ( EPF Act ), compulsory provident fund, family pension fund and deposit linked insurance are payable to employees in factories and other establishments. The EPF Act inter-alia provides that a factory mentioned in Schedule I employing more than 20 (twenty) persons, either directly or indirectly, in any capacity whatsoever, is either required to constitute its own provident fund or subscribe to the statutory employee s provident fund. The employer of such establishment is required to make a monthly contribution to the provident fund equivalent to the amount of the employee s contribution to the provident fund. There is also a requirement to maintain prescribed records and registers and filing of forms with the concerned authorities. The EPF Act also inter-alia imposes punishments on any person who avoids making payments required to be made under the schemes made under the EPF Act and specifically on employers who contravene or default in complying with certain provisions of the EPF Act. If the person committing an offence is a company, every person who at the time the offence was committed was in charge of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. 2. Employee s Compensation Act, 1923 The Employees Compensation Act, 1923 has been enacted with the object to provide compensation to workmen by employers for injuries caused by accident(s) arising out of and in the course of employment, and for occupational diseases resulting in death or disablement. The Act inter-alia lays down the amount of compensation to be paid in any such circumstance. In case the employer fails to pay the compensation under the provisions of the Act within 1 (one) month from the date it falls due, the employer may be directed to pay the compensation along with simple interest. 3. Payment of Gratuity Act, 1972 The Payment of Gratuity Act, 1972 provides for payment of gratuity to employees employed in factories, plantations, shops and other establishments who have put in a continuous service of 5 (five) years, in the event of their superannuation, retirement, resignation, death or disablement due to accidents or diseases. The rule of five year continuous service is however relaxed in case of death or disablement of an employee. Gratuity is calculated at the rate of 15 (fifteen) days wages based on the rate of wages last drawn by the employee for every completed year of service with the employer. The employer shall arrange to pay the gratuity amount within 30(thirty) days from the date it becomes payable. Presently, an employer is obliged for a maximum gratuity payout of Rs.10,00,000/- only for an employee. Page 127 of 370

129 The following are the rules which are applicable to the Company: Payment of Gratuity (Gujarat) Rules, The Minimum Wages Act, 1948 The Minimum Wages Act, 1948 ( MWA Act ) was enacted to establish minimum wages for certain categories of employees. Under this Act, the Central and the State Governments stipulate the scheduled industries and establishments and fix minimum wages. An employer who pays to any employee wages less than the minimum rate of wages fixed is punishable with imprisonment upto six months or fine upto five hundred rupees only. The following are the rules which are applicable to the Company: The Minimum Wages (Gujarat) Rules, Payment of Bonus Act, 1965 Pursuant to the Payment of Bonus Act, 1965, as amended, an employee in a factory or in any establishment where 20 (twenty) or more persons are employed on any day during an accounting year, who has worked for at least 30 (thirty) working days in a year, is eligible to be paid a bonus on the basis of profits of the establishment. Contravention of the provisions of the Payment of Bonus Act, 1965 is punishable with imprisonment up to six months or a fine upto Rs.1,000/- only or both. Further, it has been provided that if the defaulter is a company, every person in charge of its business at the time of the offence shall be liable to be proceeded against and punished accordingly. 6. The Maternity Benefit Act, 1961 The purpose of the Maternity Benefit Act, 1961 is to regulate the employment of inter-alia pregnant women in factories, plantations and other establishments for certain periods and to ensure that they get paid leave for a specified period before and after childbirth, or miscarriage or medical termination of pregnancy. It inter alia provides for payment of maternity benefits, medical bonus and prohibits the dismissal of and reduction of wages paid to pregnant women. The employer shall be liable to pay the maternity benefit at the rate of average daily wage for the period of her actual absence. In case of failure to inter-alia make such payment, the employer shall be liable to punishment. The following are the rules which are applicable to the Company: Gujarat Maternity Benefit Rules, The Payment of Wages Act, 1936 The Payment of Wages Act, 1936 ( PWA ) is applicable to the payment of wages to persons in factories and other establishments. PWA ensures that wages that are payable to the employee are disbursed by the employer within the prescribed time limit and no deductions other than those prescribed by the law are made by the employer. If the employer contravenes the provisions of the Act, he shall be punishable with fine not less than one thousand rupees only extending to seven thousand five hundred rupees only. 8. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ( SHWW Act ) provides for the protection of women at work place and prevention of sexual harassment at work place. The SHWW Act also provides for a redressal mechanism to manage complaints in this regard. Sexual harassment includes one or more of the following acts or behaviour Page 128 of 370

130 namely, physical contact and advances or a demand or request for sexual favors or making sexually coloured remarks, showing pornography or any other unwelcome physical, verbal or non-verbal conduct of sexual nature. The SHWW Act makes it mandatory for every employer of a workplace to constitute an Internal Complaints Committee which shall always be presided upon by a woman. It also provides for the manner and time period within which a complaint shall be made to the Internal Complaints Committee i.e. a written complaint is to be made within a period of 3 (three) months from the date of the last incident. If the establishment has less than 10 (ten) employees, then the complaints from employees of such establishments as also complaints made against the employer himself shall be received by the Local Complaints Committee. The penalty for non-compliance with any provision of the SHWW Act shall be punishable with a fine extending to Rs. 50,000/- only. 9. Contract Labour (Regulation and Abolition) Act, 1970 The Contract Labour (Regulation and Abolition) Act, 1970 ( CLRA ) regulates the employment of contract labour in certain establishments and to provides for its abolition in certain circumstances. The CLRA applies to every establishment in which 20 (twenty) or more workmen are employed or were employed on any day of the preceding 12 (twelve) months as contract labour. Establishment inter-alia means any place where any industry, trade, business, manufacture or occupation is carried on. Further, it contains provisions regarding constitution of Central and State Advisory Boards to carry out the functions of the Act. Every principal employer to whom this Act applies has to make an application to the registering officer as appointed by the Government. The appropriate Government shall notify in the Official Gazette the establishments in which employment of contract labour is prohibited in any process, operation or other work. To ensure the welfare and health of the contract labour, the CLRA imposes certain obligations on the contractor in relation to establishment of canteens, rest rooms, drinking water, washing facilities, first aid, other facilities and payment of wages. A contractor has been defined as in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour for any work of the establishment and includes a sub-contractor. If a person contravenes the provisions of the Act or the rules thereunder he shall be punishable with imprisonment for a term which may extend to three months or with fine which may extend to one thousand rupees, or with both. If the person committing the offence is a company, the company as well as every person in charge of its conduct at the time of the commission of the offence shall be deemed to be guilty and prosecuted accordingly. The following are the rules which are applicable: Contract Labour (Regulation and Abolition) Central Rules, Coastal Aquaculture Authority Act, 2005 The Coastal Aquaculture Authority Act, 2005 ( CAA Act ) provides for the establishment of a Coastal Aquaculture Authority ( CAA ) for regulating the activities connected with coastal aquaculture in the coastal areas. The CAA Act also inter-alia stipulates that no person shall carry on, or cause to be carried on, coastal aquaculture in a coastal area or traditional coastal aquaculture in the traditional coastal aquaculture farm which lies within such Coastal Regulation Zone as is specified thereunder and is not used for coastal aquaculture purposes on the establishment of the CAA unless he has registered his farm with the CAA. Contravention of this provision shall attract punishment including imprisonment for a term which may extend to three years or with fine which may extend to one lakh rupees, or with both. However, the CAA Act inter-alia prohibits coastal aquaculture from being carried on (i) within two hundred metres from High Tide Lines; and also (b) in creeks, rivers and backwaters within the Coastal Regulation Zone declared for the time being under the Environment (Protection) Act, Page 129 of 370

131 For the purposes of the CAA Act, coastal aquaculture means culturing, under controlled conditions in ponds, pens, enclosures or otherwise, in coastal areas, of shrimp, prawn, fish or any other aquatic life in saline or brackish water; but does not include fresh water aquaculture. Further, the term coastal area has been defined to mean the area declared as the Coastal Regulation Zone, for the time being, in the notification of the Government of India in the Ministry of Environment and Forests (Department of Environment, Forests and Wildlife) No. S.O. 114(E), dated the February 19, 1991 ( CRZ Notification, 1991 ) and includes such other area as the Central Government may, by notification in the Official Gazette, specify. The CRZ Notification, 1991 has been superseded by notification of the Government of India in the Ministry of Environment and Forests (Department of Environment, Forests and Wildlife) No. S.O. 19(E), dated the January 6, The following are the rules which are applicable: Coastal Aquaculture Authority Rules, Notification of the Government of India in the Ministry of Environment and Forests (Department of Environment, Forests and Wildlife) No. S.O. 19(E), dated the January 6, 2011 The notification of the Government of India in the Ministry of Environment and Forests (Department of Environment, Forests and Wildlife) No. S.O. 19(E), dated the January 6, 2011 ( CRZ Notification, 2011 ), has been issued in supersession of the notification of the Government of India in the Ministry of Environment and Forests, number S.O.114(E), dated the 19th February, 1991 ( CRZ Notification, 1991 ), except as respects things done or omitted to be done before such supersession. Vide the CRZ Notification, 2011 the Central Government, with a view inter-alia to ensure livelihood security to fisher communities and other local communities, living in the coastal areas, to conserve and protect coastal stretches, its unique environment and its marine area, has declared that the coastal stretches of the country and the water area upto its territorial water limit, excluding the islands of Andaman and Nicobar and Lakshadweep and the marine areas surrounding these islands upto its territorial limit, as Coastal Regulation Zone ( CRZ ) and restricted the setting up and expansion of any industry, operations or processes and manufacture or handling or storage or disposal of hazardous substances as specified in the Hazardous Substances (Handling, Management and Transboundary Movement) Rules, 2009 in the CRZ. The CRZ Notification, 2011 also inter-alia prohibits certain activities within the CRZ and regulates other activities therein. For the purposes of conserving and protecting coastal areas and marine waters, the CRZ Notification, 2011 provides for a detailed classification of the CRZ area into CRZ I, CRZ II, CRZ III, CRZ IV and areas requiring special consideration for the purpose of protecting the critical coastal environment and difficulties faced by local communities. In particular, with respect CRZ IV, activities impugning on the sea and tidal influenced water bodies shall be regulated except for traditional fishing and related activities undertaken by local communities, including inter-alia, that no untreated sewage, effluents, ballast water, ship washes, fly ash or solid waste from all activities including from aquaculture operations shall be let off or dumped. 12. The Marine Products Export Development Authority Act, 1972 The Marine Products Export Development Authority Act, 1972 ( MPEDAA ) has been enacted to provide for the establishment of an authority for the development of the marine products industry under the control of the Union and for matters connected therewith. Accordingly, the MPEDAA has inter-alia provided for the establishment of an authority called the Marine Products Export Development Authority ( the Authority ) with such constitution and to perform such functions as are specified thereunder. Further, under the MPEDAA, every owner of a fishing vessel, processing plant or storage premises for marine products or conveyance used for the transport of marine products shall, before the expiration of one month from the date on which he first became owner of such Page 130 of 370

132 fishing vessel, processing plant, storage premises or conveyance, whichever is later, apply to the Authority for registration under this Act of every such fishing vessel, processing plant, storage premises, or conveyance owned by him. The Authority may, for sufficient reason, extend the timelimit for registration by such period as it thinks fit. Such registration once made shall continue to be in force until it is cancelled by the Authority. The MPEDAA also requires every such owner to submit to the Authority returns in the form and manner prescribed. For the purposes of the MPEDAA, the term marine products has been defined thereunder to include all varieties of fishery products known commercially as shrimp, prawn, lobster, crab, fish, shell-fish, other aquatic animals or plants or parts thereof and any other products which the Authority may, by notification in the Gazette of India, declare to be marine products for the purposes of the MPEDAA. 13. Guidelines for Culture of Litopenaeus vannamei in fresh water/inland farms The Guidelines for Culture of Litopenaeus vannamei in fresh water/inland farms ( the Guidelines ) inter-alia provide that farmers who are desirous of cultivating Litopenaeus vannamei in fresh water/inland farms located outside the jurisdiction of the CAA, having water salinity above 0.5 PPT, shall be required to register their farms with the State Fisheries Department. However, the farms located within the jurisdiction of CAA shall register with CAA itself. Farmers are also inter-alia required to maintain records as set out under the Guidelines. Farmers are also prohibited from using banned drugs and antibiotics as per the list appended under the Guidelines. The Guidelines also interalia stipulates certain security related measures to be undertaken in respect of the farms. 14. Environment Protection Act, 1986 The Environmental Protection Act, 1986 ( EPA ) provides for the protection and improvement of the environment. "Environment" is defined to include water, air and land and the interrelationships which exist among water, air and land, and human beings and other living creatures, plants, microorganisms and property. Any solid, liquid or gaseous substance present in such concentration as may/tend to be injurious to the environment is a pollutant. The Central Government has the power to take all such measures as it deems necessary for protecting the environment and improving its quality. No person carrying on any industry, operation or process shall discharge or emit any environmental pollutant in excess of such standards as may be prescribed. Whoever fails to comply with the provisions of the Act shall be punishable with imprisonment for a term extending to five years or fine extending to one lakh rupees, or with both. If the person committing the offence is a company, the company as well as every person in charge of its conduct at the time of the commission of the offence shall be deemed to be guilty and prosecuted accordingly. The EPA also inter-alia requires submission of an environment statement in the prescribed manner. 15. Income-tax Act, 1961 The Income-tax Act, 1961 ( IT Act ) is applicable to every Company, whether domestic or foreign whose income is taxable under the provisions of the IT Act or Rules made there under depending upon its Residential Status and Type of Income involved. The IT Act provides for the taxation of persons resident in India on global income and persons not resident in India on income received, accruing or arising in India or deemed to have been received, accrued or arising in India. Every Company assessable to income tax under the IT Act is required to comply with the provisions thereof, including those relating to Tax Deduction at Source, Advance Tax, Minimum Alternative Tax and like. Every such Company is also required to file its returns by September 30 of each assessment year. 16. Central Sales Tax Act, 1956 Sales tax is levied on the sale of movable property in goods in the course of inter-state trade or commerce. In India, sales tax is levied both at the federal level under the Central Sales Tax Act, 1956 as well as the state level under the respective state legislation. If the goods move between States pursuant to a sale arrangement, then the taxability of such sale is determined by the Central Sales Tax Page 131 of 370

133 Act, On the other hand, the taxability of a sale of movable goods within the jurisdiction of the State is determined as per the local sales tax/value Added Tax legislation in place within such State. Central Sales Tax is payable by a dealer (i.e. a person who carries on the business of buying, selling, supplying or distributing goods) on his sales turnover at the rate prescribed in the VAT statute of the State from where the movement of the goods originate. However, a dealer is entitled to a concessional rate of 3% tax on goods which are sold to another registered dealer who intends to further re-sell them or use them in the manufacture or processing for further sale or for certain other specified purposes, subject to the condition that purchasing dealer issues a statutory Form C to the selling dealer. Every dealer, who in the course of inter-state trade or commerce, sells to a registered dealer goods of the description referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be three per cent, of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower 17. Gujarat Value Added Tax Act, 2003 All the states have in force a separate VAT statute which prescribes the rates at which VAT will be levied on taxable goods sold within that state. VAT is usually payable by a 'dealer' of goods (i.e. a person who carries on the business of selling or purchasing goods within a state) on its sales turnover. Depending on the schedule in which a good is categorized, VAT would be either exempt or levied at the rate of 1%, 4%, 12.5% or such other rate as the State Government notifies from time to time. VAT is a system of multi-point levies on each of the purchases in the supply chain with the facility of setoff input tax on sales whereby tax is paid at the stage of purchase of goods by a trader and on purchase of raw materials by a manufacturer. VAT is a consumption tax applicable to all commercial activities involving the production and distribution of goods and the provisions of services, and each State has its own VAT Act under which persons liable to pay VAT must register and obtain a registration number from the Sales Tax Officer of their respective State. The following are the rules which are applicable to the Company: Gujarat Value Added Tax Rules, Service Tax Chapter V of the Finance Act, 1994 as amended, provides for the levy of a service tax in respect of taxable services, defined therein. The service provider of taxable services is required to collect service tax from the recipient of such services and pay such tax to the Government. Every person who is liable to pay this service tax must register himself with the appropriate authorities. According to Rule 6 of the Service Tax Rules, every assesse is required to pay service tax in TR 6 challan by the 6th of the month immediately following the month to which it relates. Further, under Rule 7 (1) of Service Tax Rules, the Company is required to file a quarterly return in Form ST 3 by the 25 th of the month immediately following the half year to which the return relates. Every assesse is required to file the quarterly return electronically. 19. Professional Tax The professional tax slabs in India are applicable to those citizens of India who are either involved in any profession or trade. The State Government of each State is empowered with the responsibility of structuring as well as formulating the respective professional tax criteria and is also required to collect funds through professional tax. The professional taxes are charged on the incomes of individuals, profits of business or gains in vocations. The professional tax is charged as per the List II of the Constitution. The professional taxes are classified under various tax slabs in India. The tax payable under the State Acts by any person earning a salary or wage shall be deducted by his employer from the salary or wages payable to such person before such salary or wages is paid to him, and such Page 132 of 370

134 employer shall, irrespective of whether such deduction has been made or not when the salary and wage is paid to such persons, be liable to pay tax on behalf of such person and employer has to obtain the registration from the assessing authority in the prescribed manner. Every person liable to pay tax under these Acts (other than a person earning salary or wages, in respect of whom the tax is payable by the employer), shall obtain a certificate of enrolment from the assessing authority. 20. The Registration Act, 1908 The Registration Act, 1908 ( Registration Act ) was passed to consolidate the enactments relating to the registration of documents. The main purpose for which the Registration Act was designed was to ensure information about all deals concerning land so that correct land records could be maintained. The Registration Act is used for proper recording of transactions relating to other immovable property also. The Registration Act provides for registration of other documents also, which can give these documents more authenticity. Registering authorities have been provided in all the districts for this purpose. 21. The Indian Stamp Act, 1899 Stamp duty in relation to certain specified categories of instruments as specified under Entry 91 of the list, is governed by the provisions of the Stamp Act which is enacted by the Central Government. All others instruments are required to be stamped, as per the rates prescribed by the respective State Governments. Stamp duty is required to be paid on all the documents that are registered and as stated above the percentage of stamp duty payable varies from one state to another. Certain states in India have enacted their own legislation in relation to stamp duty while the other states have adopted and amended the Stamp Act, as per the rates applicable in the state. On such instruments stamp duty is payable at the rates specified in Schedule I of the Stamp Act. Instruments chargeable to duty under the Stamp Act which are not duly stamped are incapable of being admitted in court as evidence of the transaction contained therein. The Stamp Act also provides for impounding of instruments which are not sufficiently stamped or not stamped at all. Unstamped and deficiently stamped instruments can be impounded by the authority and validated by payment of penalty. The amount of penalty payable on such instruments may vary from state to state. The following stamp duty legislations are applicable to us: Gujarat Stamp Act, Gujarat Stamp Act, 1958 Stamp duty on instruments in the state of Gujarat is governed by the Gujarat Stamp Act, 1958 ( Stamp Act ). The Stamp Act levies stamp duty on documents/instruments by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded. All instruments chargeable with duty and executed by any person within the State of Gujarat are required to be stamped before or at the time of execution or immediately thereafter on the next working day following the day of execution. The Stamp Act also provides for impounding of instruments not duly stamped. The Stamp Act further provides that other than those specifically excluded, instruments chargeable with stamp duty and not duly stamped are incapable of being admitted in evidence for any purpose by any person having by law or consent o parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer. 23. The Indian Contract Act, 1872 The Indian Contract Act, 1872 ( Contract Act ) codifies the way in which a contract may be entered into, executed, implementation of the provisions of a contract and effects of breach of a contract. A person is free to contract on any terms he chooses. The Contract Act consists of limiting factors Page 133 of 370

135 subject to which contract may be entered into, executed and the breach enforced. It provides a framework of rules and regulations that govern formation and performance of contract. The contracting parties themselves decide the rights and duties of parties and terms of agreement. 24. The Specific Relief Act, 1963 The Specific Relief Act, 1963 ( Specific Relief Act ) applies both to movable property and immovable property and is also complimentary to the provisions of the Contract Act. The Specific Relief Act applies in cases where the Court can order specific performance of a contract. Specific relief can be granted only for purpose of enforcing individual civil rights and not for the mere purpose of enforcing a civil law. Specific performance means Court will order the party to perform his part of agreement, instead of imposing on him any monetary liability to pay damages to other party. 25. The Competition Act, 2002 The Competition Act 2002 ( Competition Act ) aims to prevent anti-competitive practices that cause or are likely to cause an appreciable adverse effect on competition in the relevant market in India. The Competition Act regulates anti-competitive agreements, abuse of dominant position and combinations. The Competition Commission of India ( Competition Commission ) which became operational from May 20, 2009 has been established under the Competition Act to deal with inquiries relating to anti-competitive agreements and abuse of dominant position and regulate combinations. The Competition Act also provides that the Competition Commission has the jurisdiction to inquire into and pass orders in relation to an anti-competitive agreement, abuse of dominant position or a combination, which even though entered into, arising or taking place outside India or signed between one or more non-indian parties, but causes an appreciable adverse effect in the relevant market in India. 26. The Companies Act, 1956 The Companies Act, 1956 deals with laws relating to companies and certain other associations. It was enacted by the parliament in The Act primarily regulates the formation, financing, functioning and winding up of companies. The Companies Act, 1956 prescribes regulatory mechanism regarding all relevant aspects, including organizational, financial and managerial aspects of companies. It deals with issue, allotment and transfer of securities and various aspects relating to company management. It provides for standard of disclosure in public issues of capital, particularly in the fields of company management and projects, information about other listed companies under the same management, and management perception of risk factors. In the functioning of the corporate sector, although freedom of companies is important, protection of the investors and shareholders, on whose funds they flourish, is equally important. The Companies Act, 1956 plays the balancing role between these two competing factors, namely, management autonomy and investor protection. 27. The Companies Act, 2013 The Companies Act, 2013, has been introduced to replace the existing Companies Act, 1956 in a phased manner. The Ministry of Corporate Affairs has vide its notification dated September 12, 2013 has notified 98 Sections of the Companies Act, 2013 and the same are applicable from the date of the aforesaid notification. A further 183 Sections have been notified on March 26, 2014 and have become applicable from April 1, The Ministry of Corporate Affairs, has also issued rules complementary to the Companies Act, 2013 establishing the procedure to be followed by companies in order to comply with the substantive provisions of the Companies Act, The Gujarat Shops and Establishments Act, 1948 The Company has its registered office at Plot No 4-5, GIDC, Olpad, Dist Surat, Gujarat , India Accordingly the provisions of the Gujarat Shops and Establishments Act, 1948 ( Shops Act ) is applicable to the Company. The Shops Act inter-alia provides for the regulation of conditions of Page 134 of 370

136 work and employment in shops, commercial establishments, residential hotels, restaurants, eating houses, theatres, other places of public amusement or entertainment and other establishments. Within the prescribed period, the employer of every establishment is required to make an submit a statement in the prescribed form with the prescribed fees to the Inspector of the local area concerned for the purpose of obtaining registration under the Shops Act. The registration certificate, if granted, shall, unless cancelled earlier, remain in force from the date of its grant upto the end of the year in which it is granted. The same shall be renewable from time to time for a period not exceeding three years, provided however, that any such period shall not include a fraction of a year. The Shops Act further requires that the registration certificate be prominently displayed at the premises of the establishment. Additionally, the State Government has been empowered to inter-alia declare any establishment or class of establishments to which, or any person or class of persons to whom, the Shops Act or any of the provisions thereof does not for the time being apply, to be an establishment or class thereof or a person or class thereof to which or whom the Shops Act or any provisions thereof with such modifications or adaptations as may in the opinion of the [State] Government be necessary shall apply. The Shops Act also requires an employer to maintain the registers and records and display on the premises of the establishment such notices as may be prescribed. Further, all such registers and records are required to be kept on the premises of the relevant establishment. 29. The Trademarks Act, 1999 Under the Trademarks Act, 1999, a trademark is a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others used in relation to goods and services to indicate a connection in the course of trade between the goods and some person having the right as proprietor to use the mark. A mark may consist of a device, brand, heading, label, ticket, name signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof. Section 18 of the Trademarks Act requires that any person claiming to be the proprietor of a trade mark used or proposed to be used by him, must apply for registration in writing to the registrar of trademarks. The trademark, once applied for and which is accepted by the Registrar of Trademarks ( the Registrar ), is to be advertised in the trademarks journal by the Registrar. Oppositions, if any, are invited and, after satisfactory adjudications of the same, a certificate of registration is issued by the Registrar. The right to use the mark can be exercised either by the registered proprietor or a registered user. The present term of registration of a trademark is 10 years, which may be renewed for similar periods on payment of a prescribed renewal fee. 30. The Copyright Act, 1957 ("Copyright Act") The Copyright Act, grants protection to the authors of literary, artistic, dramatic, musical, photographic, cinematographic or sound recording works from unauthorized uses. Various rights including ownership and economic rights are conferred on the author. These include the right to reproduce the work in any form, issue copies to the public, perform it, and offer for sale and hire. The penalty for general infringement of copyright is imprisonment of maximum three years and a fine of up to Rs. 200,000/ Foreign Exchange Management Act, 1999 ( the FEMA ) Foreign investment in aquaculture is governed by the provisions of the FEMA read with the applicable regulations. The Department of Industrial Policy and Promotion ( DIPP ), Ministry of Commerce and Industry has issued Consolidated FDI Policy (the FDI Circular ) which consolidates the policy framework on Foreign Direct Investment ( FDI ), with effect from April 17, The FDI Circular consolidates and subsumes all the press notes, press releases, and clarifications on FDI issued by DIPP till April 17, Foreign investment is permitted (except in the prohibited sectors) in Indian Page 135 of 370

137 companies either through the automatic route or the approval route, depending upon the sector in which foreign investment is sought to be made. Under the approval route, prior approval of the Government of India through Foreign Investment Promotion Board ( FIPB ) is required. FDI for the items or activities that cannot be brought in under the automatic route may be brought in through the approval route. Where FDI is allowed on an automatic basis without the approval of the FIPB, the RBI would continue to be the primary agency for the purposes of monitoring and regulating Foreign Investment. In cases where FIPB approval is obtained, the issue price shall be fixed as per the RBI guidelines and a declaration in the prescribed form, detailing the foreign investment, must be filed with the RBI once the foreign investment is made in the Indian company. The RBI, in exercise of its power under the FEMA, has also notified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 to prohibit, restrict or regulate, transfer by or issue security to a person resident outside India. The FDI Circular permits investment up to 100% Foreign Direct Investment under the automatic route in aquaculture, under controlled conditions. It has been clarified that in relation to aquaculture, the scope of the term under controlled conditions covers (a) Aquariums (b) Hatcheries where eggs are artificially fertilized and fry are hatched and incubated in an enclosed environment with artificial climate control. Besides the above, FDI is not allowed in any other agricultural sector/activity. RBI has also issued Master Circular on Foreign Investment in India dated July 01, 2014 which is valid till June 30, In terms of the Master Circular, an Indian company may issue fresh shares to person resident outside India (who are eligible to make investments in India, for which eligibility criteria are as prescribed). Such fresh issue of shares shall be subject to inter-alia, the pricing guidelines prescribed under the Master Circular. As mentioned above, the Indian company making such fresh issue of shares would be subject to the reporting requirements, inter-alia with respect to consideration for issue of shares and also subject to making certain filings including filing of Form FC-GPR. Page 136 of 370

138 OUR HISTORY AND CERTAIN OTHER CORPORATE MATTERS Our Company was incorporated as Zeal Aqua Private Limited in Surat, Gujarat, a private limited company under the provisions of the Companies Act, 1956 vide certificate of incorporation dated March 6, 2009 bearing registration no issued by the Assistant Registrar of Companies, Gujarat, Dadra and Nagar Havelli. Subsequently, vide Fresh Certificate of Incorporation dated March 31, 2015, our Company was converted into a public limited company and the name of our Company was changed to Zeal Aqua Limited. Our corporate identification number is U05004GJ2009PLC Mr. Shantilal Patel, Mr. Pradeep Navik, Mrs. Rashmiben Patel and Mrs. Susanben Navik are the initial subscribers to the Memorandum and Articles of Association of our Company. Mr. Shantilal Patel and Mr. Pradeep Navik are the Promoters of our Company. For information on our Company s profile, activities, products, market, growth, managerial competence, standing with reference to prominent competitors, major suppliers and customers, see the sections Our Management, Our Business and Our Industry beginning on pages 143, 110 and 93 respectively. CHANGE OF REGISTERED OFFICE At the time of incorporation, our Registered Office was situated at 46 47, Hariom Nagar Society, Rander, Surat , Gujarat, India. Subsequently, our Registered Office was shifted 38, Hariom Nagar Society, Rander, Surat , Gujarat with effect from April 08, 2009 for administrative convenience. Our Company s Registered Office is currently situated at At Olpad, GIDC, Pl. No. 4 and 5, Ta Olpad, Surat The details of changes in the address of our Registered Office are set forth below: From To Effective Date Reason 38, Hariom Nagar Administrative Society, Rander, Surat - April 8, 2009 convenience , Hariom Nagar Society, Rander, Surat , Hariom Nagar Society, Rander, Surat At Olpad, GIDC, Pl. No. 4 and 5, Ta Olpad, Surat August 13, 2014 Administrative convenience KEY EVENTS AND MILESTONES IN THE HISTORY OF OUR COMPANY Period Event Incorporation of the Company 2009 Awarded the Best Aquaculture Company by Girnar Fisheries Organizations from Doordarshan, Indian National Media Channel 2010 Awarded Best Farmer Award by CIFE 2011 Won Bhumi Nirman Award for best quality of farms and infrastructure Initiated the concept of P E Lined Ponds in Gujarat Page 137 of 370

139 Period 2013 Event Awarded the Best Farmers for Category L. Vannamei by the Marine Products Export Development Authority, Ministry of Commerce & Industry, Government of India at the Aqua Aquaria India Turnover crossed Rs. 100 Crores 2015 Got converted into a public limited company OUR MAIN OBJECTS The main objects of our Company, as contained in our Memorandum of Association, are as set forth below: 1. To Carry on the aqua business to catch, produce, product, procure, provide, process, promote, preserve, kept, pack, bottle, can, extract, smoke, cure, freeze, prepare, warehouse, store, dry, stockiest, representative, middleman, liasioner, cosigner, collaborator, consultant, or otherwise, to deal in all sorts of fresh, chilled, dried, salted, in brine or frozen seafood, fish meals, fish and pawn products. 2. To manufacture and trade in all types of foods, medicines and other consumables used in the fishes of all sorts and to all types of equipments including boats, ferry boats, nets used in fishing. 3. To carry on the business as manufactures, producers, processors, buyers, sellers, importers, exporters and dealers in every kind and description of food and foodstuff whether vegetarian or non-vegetarian, milk and milk products including creams, butter, ghee, cheese, condensed milk, malted milk powders, skimmed milk, ice-cream, milk foods, canned foods, and fish preparation, meat and meat preparation and the foods made from any substances of animal and birds and the business poultry farming. 4. To carry on the business of farming, agriculture and horticulture in its branches and to grow, produce, manufacture, process, prepare, refine, extract, manipulate, hydrolyze, buy, sell, market or deal in all kinds of agricultural, horticultural, dairy, poultry and farm produces and products including food grains, cereals, seeds, soybeans, corn oils, cash crops, plants, flowers, vegetables, edible oils, meat fish, eggs, animal and human foods and food products. 5. To cultivate any plantation or other agricultural produces in all its branches and carry on the business as cultivators, buyers and dealers in vegetables, grains, vanaspaties and all other agricultural producers and to prepare, manufacture and render marketable any such produces and to sell, market dispose off or deal in any such produces either in its prepare, manufactured or raw state and to purchase, hold, develop, cultivate any agricultural, barren land for the purpose herein mentioned. 6. To undertake research and developed in fields of breeding and presentation of fishes and aquatic animals, milk production and preservation, method of farming, harvesting, and preservation of any agricultural products, horticulture, and poultry farming. Page 138 of 370

140 AMENDMENTS TO THE MEMORANDUM OF ASSOCIATION Since incorporation, the following changes have been made to our Memorandum of Association Date of Shareholder s Approval EGM April 8, 2009 Amendment Amendment to the Main Object clause by substitution of following clause numbered III (A)(1) and III(A)(2) in place of existing clause III(A)(1) and III(A)(2) and inserting following clause III(A)(3) to III(A)(6) after existing clause III(A)(2): 1. To Carry on the aqua business to catch, produce, product, procure, provide, process, promote, preserve, kept, pack, bottle, can, extract, smoke, cure, freeze, prepare, warehouse, store, dry, stockiest, representative, middleman, liasioner, cosigner, collaborator, consultant, or otherwise, to deal in all sorts of fresh, chilled, dried, salted, in brine or frozen seafood, fish meals, fish and pawn products. 2. To manufacture and trade in all types of foods, medicines and other consumables used in the fishes of all sorts and to all types of equipments including boats, ferry boats, nets used in fishing. 3. To carry on the business as manufactures, producers, processors, buyers, sellers, importers, exporters and dealers in every kind and description of food and foodstuff whether vegetarian or non-vegetarian, milk and milk products including creams, butter, ghee, cheese, condensed milk, malted milk powders, skimmed milk, ice-cream, milk foods, canned foods, and fish preparation, meat and meat preparation and the foods made from any substances of animal and birds and the business poultry farming. 4. To carry on the business of farming, agriculture and horticulture in its branches and to grow, produce, manufacture, process, prepare, refine, extract, manipulate, hydrolyze, buy, sell, market or deal in all kinds of agricultural, horticultural, dairy, poultry and farm produces and products including food grains, cereals, seeds, soybeans, corn oils, cash crops, plants, flowers, vegetables, edible oils, meat fish, eggs, animal and human foods and food products. 5. To cultivate any plantation or other agricultural produces in all its branches and carry on the business as cultivators, buyers and dealers in vegetables, grains, vanaspaties and all other agricultural producers and to prepare, manufacture and render marketable any such produces and to sell, market dispose off or deal in any such produces either in its prepare, manufactured or raw state and to purchase, hold, develop, cultivate any agricultural, barren land for the purpose herein mentioned. 6. To undertake research and developed in fields of breeding and presentation of fishes and aquatic animals, milk production and preservation, method of farming, harvesting, and preservation of any Page 139 of 370

141 Date of Shareholder s Approval Amendment agricultural products, horticulture, and poultry farming. EGM - May 26, 2009 The Authorised share capital of the Company increased from Rs 1,00,000 consisting of 10,000 Equity shares of Rs 10 each to Rs 1,00,00,000 consisting of 10,00,000 Equity shares of Rs 10 each. EGM - January 1, 2011 The Authorised share capital of the Company increased from Rs 1,00,00,000 consisting of 10,00,000 Equity shares of Rs 10 each to Rs 1,50,00,000 consisting of 15,00,000 Equity shares of Rs 10 each. EGM- July 22, 2013 The Authorised share capital of the Company increased Rs 1,50,00,000 consisting of 15,00,000 Equity shares of Rs 10 each to Rs 2,00,00,000 consisting of 20,00,000 Equity shares of Rs 10 each. EGM - March 25, 2015 EGM - March 25, 2015 The change of name from Zeal Aqua Private Limited to Zeal Aqua Limited. The authorised share capital of the Company increased from Rs 2,00,00,000 consisting of 20,00,000 Equity shares of Rs 10 each to Rs. 5,00,00,000 consisting of 50,00,000 Equity shares of Rs 10 each. HOLDING COMPANY OF OUR COMPANY Our Company has no holding company as on this date of filing of this Draft Prospectus. SUBSIDIARY COMPANY OF OUR COMPANY There is no subsidiary of our Company as on this date of filing of this Draft Prospectus. PROMOTERS OF OUR COMPANY The promoters of our Company are Mr. Shantilal Patel and Mr. Pradeep Navik. For details, see Our Promoter and Promoter Group beginning on page 155 of this Draft Prospectus. CAPITAL RAISING ACTIVITIES THROUGH EQUITY OR DEBT For details regarding our capital raising activities through equity and debt, refer to the section titled Capital Structure beginning on pages 56 of this Draft Prospectus. INJUNCTIONS OR RESTRAINING ORDERS The Company is not operating under any injunction or restraining order. Page 140 of 370

142 MERGERS AND ACQUISITIONS IN THE HISTORY OF OUR COMPANY Our Company has not merged/amalgamated itself nor has acquired any business/undertaking, since incorporation. DETAILS OF PAST PERFORMANCE Our Company was incorporated in March For details in relation to our financial performance, for preceding five years, including details of non-recurring items of income, refer to section titled Financial Statements beginning on page 173 of this Draft Prospectus. SHAREHOLDERS AGREEMENTS Our Company has not entered into any shareholders agreement as on date of filing of this Draft Prospectus. OTHER AGREEMENTS Our Company has not entered into any agreements/arrangement except under normal course of business of the Company, as on the date of filing of this Draft Prospectus. STRATEGIC/ FINANCIAL PARTNERS Our Company does not have any strategic/financial partner as on the date of filing of this Draft Prospectus. DEFAULTS OR RESCHEDULING OF BORROWINGS WITH FINANCIAL INSTITUTIONS OR BANKS There have been no defaults or rescheduling of borrowings with financial institutions or banks as on the date of this Draft Prospectus. CHANGE IN ACTIVITIES OF OUR COMPANY IN THE LAST FIVE YEARS Our Company was incorporated in March Since incorporation, we have not changed the activities of our Company. STRIKES AND LOCKOUTS There have been no strikes or lockouts in our Company since incorporation. Page 141 of 370

143 REVALUATION OF ASSETS Our Company has not revalued its assets since incorporation and has not issued any Equity Shares including bonus shares by capitalizing any revaluation reserves. TIME AND COST OVERRUNS IN SETTING UP PROJECTS As on the date of this Draft Prospectus, there have been no time and cost overruns in any of the projects undertaken by our Company. NUMBER OF SHAREHOLDERS Our Company has 40 shareholders as on date of this Draft Prospectus. Page 142 of 370

144 OUR MANAGEMENT BOARD OF DIRECTORS Under our Articles of Association we are required to have not less than 3 directors and not more than 15 directors, subject to the applicable provisions of the Companies Act. We currently have six directors on our Board. The following table sets forth details regarding our Board of Directors as on the date of this Draft Prospectus: Name, Father s/husband s Name, Sr No. Designation, Address, Occupation, Nationality, Term and DIN 1. Name: Mr. Shantilal Patel Age: 58 years Father s Name: Ishwarbhai Patel Designation: Chairman and Managing Director Address: 46 and 47, Hariohm Nagar, Rander, Surat Occupation: Business Nationality: Indian Term: Upto March 24, 2020 DIN: Name: Mr. Pradeep Navik Age: 53 years Father s Name: Ratilal Navik Designation: Whole-time Director Address: 14-15, Sugam Society, Rander Road, Adajan Patia, Surat Occupation: Business Nationality: Indian Term: Upto March 24, 2020, subject to liable to retire by rotation DIN: Name: Mr. Rohan Navik Age:28 years Father s Name: Pradeep Navik Designation: Whole-time Director Address: 14-15, Sugam Soc, Adajan Patia, Rander Road, Surat Occupation: Business Nationality: Indian Term: Upto March 24, 2020, subject to liable to retire by rotation DIN: Page 143 of 370 Date of Appointment as Director Initial Appointment: March 6, 2009 Appointment as Chairman & Managing Director: March 25, 2015 for a term of 5 years Initial Appointment: March 6, 2009 Appointment as Wholetime Director: March 25, 2015 Initial Appointment: June 6, 2011 Appointment as Wholetime Director: March 25, 2015 Other Directorship Private Limited Companies: 1. Mukesh Hotels Private Limited 2. Rati Aqua Private Limited 3. Jacob Foods Private Limited Public Limited Companies: Nil Private Limited Companies: 1. King Marine Products Private Limited 2. Rati Aqua Private Limited 3. Jacob Foods Private Limited Public Limited Companies: Nil Private Limited Companies: 1. Rati Aqua Private Limited 2. Mahesh Aqua Farm Private Limited Public Companies: Nil Limited

145 Name, Father s/husband s Name, Sr No. Designation, Address, Occupation, Nationality, Term and DIN 4. Name: Mr. Naginbhai Patel Age: 62 years Father s Name: Paragbhai Patel Designation: Independent Director Address: H. No. 109, At-Kumbhari Post- Sondlakhara, Navapara Kumbhari Ta-Olpad Surat Occupation: Service Nationality: Indian Term: Term of 5 years upto March 24, 2020 DIN: Name: Mrs. Roshan Kadodwala Age: 57 years Father s Name: Parvez Olpadwala Designation: Independent Director Address: A-501, Agam Apartment, Athwalines, Surat , Gujarat Occupation: Self-employed Nationality: Indian Term: Term of 5 years upto March 24, 2020 DIN: Name: Mr. Maheshbhai Mistry Age: 65 years Father s Name: Nathu Mistry Designation: Independent Director Address: B/21, Vaibhav Nagar Society, Palanpur Road, Surat Occupation: Service Nationality: Indian Term: Term of 5 years upto March 24, 2020 DIN: Date of Appointment as Director Initial Appointment: March 25, 2015 Initial Appointment: March 25, 2015 Initial Appointment: March 25, 2015 Other Directorship Private Limited Companies: 1. Rameshwar Aquaculture Private Limited Public Companies: Nil Private Companies: Nil Public Companies: Nil Private Companies: Nil Public Companies: Nil Limited Limited Limited Limited Limited Page 144 of 370

146 BRIEF BIOGRAPHIES OF OUR DIRECTORS Mr. Shantilal Patel Mr. Shantilal Patel, aged 58 years, is currently the Chairman and Managing Director of our Company. He has been director since incorporation. He was originally in engineering business with an experience of more than 20 years in steel fabrication. Later he diversified his interest in aquaculture and gained rich experience of 15 years in the field of shrimp farming. His tech savvy mindset immensely contributed towards development of best infrastructure by adopting innovative method in aquaculture farming field. He is responsible for making strategic decisions and decisions relating to business development of the Company. He has been awarded most talented Aqua Farmer & Performer Award for the highest production in shrimp farming and is a spoke s person in Surat Aquaculture Farmers Association (SAFA). He started the concept of P.E. Lined Ponds in Gujarat. Mr. Pradeep Navik Mr. Pradeep Navik, aged 53 years, is currently the Whole-time Director of our Company. He has been director since incorporation. He has over 20 years of experience in Aquaculture industry. He is responsible for providing technical support to the employees of the Company and also looks after the financial functions of the Company. He introduced the concept of Satellite Farming in our Company. He is President of Surat Aquaculture Farmers Association (SAFA) and also Vic-President of Gujarat Aquaculture Association (GAA). Mr. Rohan Navik Mr. Rohan Navik, aged 28 years, is the youngest Director of our Company. He was appointed as director of our Company on June 6, He is responsible for decisions related to farm development and day to day affairs of the Company. He brings with him dynamic and innovative vision which is required for sustained growth of our Company. He is a Master of International Business from University of South Australia. Mr. Naginbhai Patel Mr. Naginbhai Patel, aged 62 years, has been appointed as an Independent Director of our Company on March 25, He served around 36 years as Talati of various villages in Surat district, of which he was Union Leader of Talati Union for 22 years. Currently he is director of Shri Sayan Sugar Factory and P K Desai Kelwani Mandal (College) at Olpad. He is also Vice President of Kumbhari Krishi Piyat Mandali. Mrs. Roshan Kadodwala Mrs. Roshan Kadodwala, aged 57 years, has been appointed as an Independent Director of our Company on March 25, Page 145 of 370

147 Mr. Maheshbhai Mistry Mr. Maheshbhai Mistry, aged 65 years, has been appointed as an Independent Director of our Company on March 25, He holds Qualified Craft Instructor Certificate in trade of Fitter from Central Training Institute for Instructors, Ministry of Labour, Employment and Rehabilitation. CONFIRMATIONS As on the date of this Draft Prospectus: 1. Mr. Pradeep Navik and Mr. Shantilal Patel are related to Mr. Rohan Navik as Father and Fatherin-law respectively. Hence they are relatives within the meaning of Section 2 (77) of the Companies Act, There are no arrangements or understanding with major shareholders, customers, suppliers or any other entity, pursuant to which any of the Directors or Key Management Personnel were selected as a Director or member of the senior management. 3. The Directors of our Company have not entered into any service contracts with our Company which provides for benefits upon termination of employment. 4. None of the above mentioned Directors are on the RBI List of willful defaulters. 5. Further, none of our Directors are or were directors of any company whose shares were (a) suspended from trading by stock exchange(s) or (b) delisted from the stock exchanges during the term of their directorship in such companies. 6. None of the Promoters, persons forming part of our Promoter Group, Directors or persons in control of our Company, has been or is involved as a promoter, director or person in control of any other company, which is debarred from accessing the capital market under any order or directions made by SEBI or any other regulatory authority. REMUNERATION/COMPENSATION OF DIRECTORS During the last financial year ended on March 31, 2014, the directors have been paid gross remuneration as per following (Rs. In Lakhs) Name of Director Remuneration received in year (in Rs.) Shantilal Patel Pradeep Navik Rohan Navik None of the Directors except above have received any remuneration during the Financial Year Page 146 of 370

148 Terms and conditions of employment of our Executive Directors Mr. Shantilal Patel is Director of our Company since incorporation. During incorporation, he was appointed as the non-executive director of our Company. On March 25, 2015, he was re-designated as Chairman & Managing Director of our Company for a period of 5 years, at the meeting of our shareholders held on March 25, 2015 and Agreement dated March 25, He is entitled to a remuneration of Rs. 2 lakhs per month (Salary may be revised periodically based on recommendation of Board of Director or Nomination & Remuneration Committee, if any and may be increased upto Rs. 42 Lakhs per annum), as well as perquisites provision of provident fund, super annuation fund, leave encashment, gratuity and out of pocket expenses as incurred, subject to the provisions of Companies Act and other applicable laws, if any. Pradeep Navik is Director of our Company since incorporation. During incorporation, he was appointed as the non-executive director of our Company. On March 25, 2015, he was re-designated as Whole-time Director of our Company subject to liable to retire by rotation, at the meeting of our shareholders held on March 25, 2015 and Agreement dated March 25, He is entitled to a remuneration of Rs. 2 lakhs per month (Salary may be revised periodically based on recommendation of Board of Director or Nomination & Remuneration Committee, if any and may be increased upto Rs. 42 Lakhs per annum), as well as perquisites provision of provident fund, super annuation fund, leave encashment, gratuity and out of pocket expenses as incurred, subject to the provisions of Companies Act and other applicable laws, if any. Rohan Navik was appointed as Executive Director for our Company with effect from June 6, 2011, at the meeting of our shareholders held on June 6, He was entitled to remuneration decided by the Board of Directors from time to time. He has been re-appointed, subject to liable to retire by rotation, at the meeting of our shareholders held on March 25, 2015 and Agreement dated March 25, He is entitled to the same remuneration of Rs. 2 lakhs per month (Salary may be revised periodically based on recommendation of Board of Director or Nomination & Remuneration Committee, if any and may be increased upto Rs. 42 Lakhs per annum), as well as perquisites provision of provident fund, super annuation fund, leave encashment, gratuity and out of pocket expenses as incurred, subject to the provisions of Companies Act and other applicable laws, if any. Non-executive and Independent Directors of the Company may be paid sitting fees, commission and any other amounts as may be decided by our Board in accordance with the provisions of the Articles of Association, the Companies Act, 2013 and other applicable laws and regulations. SHAREHOLDING OF OUR DIRECTORS IN OUR COMPANY As per the Articles of Association of our Company, a Director is not required to hold any qualification shares. The following table details the shareholding of our Directors as on the date of this Draft Prospectus: Sr. No. Name of the Director No. of Equity Shares Page 147 of 370 % of Pre Issue Equity Share Capital % of Post Issue Equity Share Capital 1. Shantilal Patel* 4,47, Pradeep Navik** 4,15, Rohan Navik*** 48, Naginbhai Patel Roshan Kadodwala Maheshbhai Mistry *1,92,000 Equity Shares are jointly held by Mr. Shantilal Patel with other shareholders, which are excluded above

149 **2,24,000 Equity Shares are jointly held by Mr. Pradeep Navik with other shareholders, which are excluded above ***48,000 Equity Shares are jointly held by Mr. Rohan Navik and Mr. Pradeep Navik, which are included in Mr. Rohan Navik s shareholding above. INTERESTS OF DIRECTORS Our executive Directors may be deemed to be interested to the extent of remuneration paid to them for services rendered as a Director of our Company and reimbursement of expenses payable to them. For details, see Remuneration/Compensation of Directors above. Further, our Non- Executive Directors are entitled to receive sitting fees for attending meetings within the limits laid down in the Companies Act and as decided by our Board. Mr. Shantilal Patel and Mr. Pradeep Navik are interested to the extent of being Promoters of our Company. Further, our Directors, Mr. Shantilal Patel, Mr. Pradeep Navik and Mr. Rohan Navik are also partners in various partnership entities with whom our Company has entered into collaboration agreements for the purpose of Shrimp Farming. Further, except for as disclosed under paragraph titled Shareholding of our Directors in our Company on page [ ] of Draft Prospectus, none of our Directors hold any Equity Shares in our Company. Our Directors may also be interested to the extent of Equity Shares, if any, held by them or held by the entities in which they are associated as promoters, directors, partners, proprietors or trustees or held by their relatives or that may be subscribed by or allotted to the companies, firms, ventures, trusts in which they are interested as promoters, directors, partners, proprietors, members or trustees, pursuant to the Offer. Our Company has taken loan from directors and from certain entities in which our directors may be interested in various capacities; hence they may be interested to the extent of interest received. For details refer chapters titled Related Parties Transactions, Financial Indebtedness, Our Promoters and Promoter Group and Our Business beginning from pages 171, 220, 155 and 110 respectively of Draft Prospectus. Apart from Mrs. Kimi Navik, Mr. Preety Mistry and Mr. Dhaval Patel, none of the relatives of our Directors are appointed to a place or office of profit in our Company. None of our Directors have been appointed on our Board pursuant to any arrangement with our major shareholders, customers, suppliers or others. Our Directors are not interested in the appointment of or acting as Underwriters, Registrar and Bankers to the Issue or any such intermediaries registered with SEBI. PROPERTY INTEREST Except as stated/referred to in the heading titled Property beginning on page 124 and chapter titled Related Party Transaction beginning on page 171 of the Draft Prospectus, our Directors have not entered into any contract, agreement or arrangements, during preceding two years, in which the Directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed to be made to them. Further our Directors do not have any interest in any immovable property to be acquired by the Company. INTEREST IN THE BUSINESS OF OUR COMPANY Save and except as stated otherwise in Related Party Transactions in the chapter titled Financial Statements as Restated beginning on page 173 of Draft Prospectus, our Directors do not have any other interests in our Company as on the date of the Draft Prospectus. Page 148 of 370

150 SHAREHOLDING OF DIRECTORS IN SUBSIDIARIES AND ASSOCIATE COMPANIES Our Company does not have a subsidiary or associate Company. CHANGES IN OUR BOARD OF DIRECTORS DURING THE LAST THREE YEARS Following are the changes in directors of our Company in last three years prior to the date of this Draft Prospectus. Name Date of event Nature of event Reason Susanben Navik December 20, 2014 Cessation Resignation Rashmiben Patel December 20, 2014 Cessation Resignation Appointment of Non- Naginbhai Patel March 25, 2015 Appointment Executive Director / Independent Director Appointment of Non- Roshan Kadodwala March 25, 2015 Appointment Executive Director / Independent Director Appointment of Non- Maheshbhai Mistry March 25, 2015 Appointment Executive Director / Independent Director BORROWING POWERS OF THE BOARD Pursuant to a special resolution passed at an Annual General Meeting of our Company held on September 30, 2014, consent of the Company be and is hereby accorded, to the Board of Directors of the Company under Section 180(1)(c) of the Companies Act, 2013 and any other provisions related thereto to borrow any sums or sums of moneys from time to time, notwithstanding that the money or moneys to be borrowed, together with the money already borrowed by the Company, may exceed aggregate of its paid up capital and free reserves, apart from temporary loans obtained from the company s bankers in the ordinary course of business, the total amount shall not exceed the sum Rs. 100 crores (Rupees One Hundred Crores Only). CORPORATE GOVERNANCE The provisions of the SME Listing Agreement, to be entered into by our Company with the BSE, will be applicable to our Company immediately upon the listing of our Equity Shares with BSE SME Platform. We have complied with the corporate governance code in accordance with Clause 52 (as applicable) of the SME Listing Agreement, particularly in relation to appointment of Independent Directors to our Board and constitution of the audit committee and stakeholder s relationship committee. Our Company undertakes to take all necessary steps to continue to comply with all the requirements of Clause 52 of the SME Listing Agreement. Our Company stands committed to good corporate governance practices based on the principles such as accountability, transparency in dealings with our stakeholders, emphasis on communication and transparent reporting. We have complied with the requirements of the applicable regulations, including the SME Listing Agreement to be executed with the BSE and the SEBI Regulations, in respect of Page 149 of 370

151 corporate governance including constitution of the Board and Committees thereof. The corporate governance framework is based on an effective independent Board, the Board s supervisory role from the executive management team and constitution of the Board Committees, as required under law. We have a Board constituted in compliance with the Companies Act and the Listing Agreement in accordance with best practices in corporate governance. The Board functions either as a full Board or through various committees constituted to oversee specific operational areas. Currently our Board has six directors out of which three are Independent Directors and three are Executive Directors. The constitution of our Board is in compliance with the requirements of Clause 52 of the SME Listing Agreement. The following committees have been formed in compliance with the corporate governance norms: A. Audit Committee B. Stakeholders Relationship Committee C. Nomination and Remuneration Committee Audit Committee Our Company has constituted an audit committee ("Audit Committee"), as per section 177 of the Companies Act 2013 and Clause 52 of the SME Listing Agreement to be entered with SME, vide resolution passed at the meeting of the Board of Directors held on March 25, The terms of reference of Audit Committee adheres to the requirements of Clause 52 of the Listing Agreement, proposed to be entered into with the Stock Exchange in due course. The committee presently comprises the following three (3) directors: Name of the Director Status Nature of Directorship Naginbhai Patel Member Independent Director Maheshbhai Mistry Member Independent Director Shantilal Patel Member Chairman and Managing Director The Chairman of the Committee will be decided by the members of the committee. The Company Secretary and Compliance Officer of the Company would act as the Secretary to the Audit Committee. The Audit Committee shall have following powers: a. To investigate any activity within its terms of reference, b. To seek information from any employee c. To obtain outside legal or other professional advice, and d. To secure attendance of outsiders with relevant expertise if it considers necessary. The Audit Committee shall mandatorily review the following information: a. Management discussion and analysis of financial condition and results of operations; b. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management; c. Management letters / letters of internal control weaknesses issued by the statutory auditors; d. Internal audit reports relating to internal control weaknesses; and Page 150 of 370

152 e. The appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the Audit Committee. The recommendations of the Audit Committee on any matter relating to financial management, including the audit report, are binding on the Board. If the Board is not in agreement with the recommendations of the Committee, reasons for disagreement shall have to be incorporated in the minutes of the Board Meeting and the same has to be communicated to the shareholders. The Chairman of the Audit committee has to attend the Annual General Meetings of the Company to provide clarifications on matters relating to the audit. The role of the Audit Committee not limited to but includes: 1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors 4. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: i. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013; ii. Changes, if any, in accounting policies and practices and reasons for the same; iii. Major accounting entries involving estimates based on the exercise of judgment by management; iv. Significant adjustments made in the financial statements arising out of audit findings; v. Compliance with listing and other legal requirements relating to financial statements; vi. Disclosure of any related party transactions; vii. Qualifications in the draft audit report. 5. Reviewing, with the management, the half yearly financial statements before submission to the board for approval. 6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, right issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/draft Prospectus/ Prospectus /notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. 7. Review and monitor the auditor s independence, performance and effectiveness of audit process. 8. Approval or any subsequent modification of transactions of the company with related parties; 9. Scrutiny of inter-corporate loans and investments; 10. Valuation of undertakings or assets of the company, wherever it is necessary; 11. Evaluation of internal financial controls and risk management systems; 12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems Page 151 of 370

153 13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. 14. Discussion with internal auditors any significant findings and follow up there on. 15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. 16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. 17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. 18. To oversee and review the functioning of the vigil mechanism which shall provide for adequate safeguards against victimization of employees and directors who avail of the vigil mechanism and also provide for direct access to the Chairperson of the Audit Committee in appropriate and exceptional cases. 19. Call for comments of the auditors about internal control systems, scope of audit including the observations of the auditor and review of the financial statements before submission to the Board; 20. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate. 21. To investigate any other matters referred to by the Board of Directors; 22. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Explanation (i): The term "related party transactions" shall have the same meaning as contained in the Accounting Standard 18, Related Party Transactions, issued by The Institute of Chartered Accountants of India. Meeting of Audit Committee and relevant Quorum The audit committee shall meet at least 4 times in a year and not more than 4 months shall elapse between 2 meetings. The quorum shall be either 2 members or one third of the members of the Audit Committee whichever is greater, but there shall be a minimum of 2 Independent Directors, who are members, present. Stakeholder s Relationship Committee Our Company has constituted a shareholder / investors grievance committee ("Stakeholders Relationship Committee") to redress complaints of the shareholders. The Stakeholders Relationship Committee was constituted vide resolution passed at the meeting of the Board of Directors held on March 25, The Stakeholder s Relationship Committee comprises the following Directors: Name of the Director Status Nature of Directorship Mahesh Mistry Chairman Independent Director Naginbhai Patel Member Independent Director Roshan Kadodwala Member Independent Director The Company Secretary and Compliance Officer of the Company would act as the Secretary to the Stakeholder s Relationship Committee. The Stakeholders Relationship Committee shall oversee all matters pertaining to investors of our Company. The terms of reference of the Stakeholders Relationship Committee include the following: Page 152 of 370

154 1. Efficient transfer of shares; including review of cases for refusal of transfer / transmission of shares and debentures; 2. Redressal of security holder s/investor s complaints; 3. Reviewing on a periodic basis the approval/refusal of transfer or transmission of shares, debentures or any other securities; 4. Issue of duplicate certificates and new certificates on split/consolidation/renewal; 5. Allotment and listing of shares; 6. Reference to statutory and regulatory authorities regarding investor grievances; and 7. To otherwise ensure proper and timely attendance and redressal of investor queries and grievances; 8. Any other power specifically assigned by the Board of Directors of the Company Quorum for Stakeholders Relationship Committee The quorum necessary for a meeting of the Stakeholders Relationship Committee shall be two members. Nomination and Remuneration Committee Our Company has constituted a Nomination and Remuneration Committee in accordance section 178 of Companies Act The constitution of the Nomination and Remuneration Committee was approved by a Meeting of the Board of Directors held on March 25, The said committee is comprised as under: The Nomination and Remuneration Committee comprises the following Directors: Name of Director Designation in Committee Nature of Directorship Naginbhai Patel Chairman Independent Director Maheshbhai Mistry Member Independent Director Roshan Kadodwala Member Independent Director The Company Secretary and Compliance Officer of the Company would act as the Secretary to the Nomination and Remuneration Committee. The terms of reference of the Nomination and Compensation Committee are: a. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees; b. Formulation of criteria for evaluation of Independent Directors and the Board; c. To ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks. d. Devising a policy on Board diversity; e. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board of Directors their appointment and removal and shall carry out evaluation of every director s performance Quorum for Nomination and Remuneration Committee The quorum necessary for a meeting of the Nomination and Remuneration Committee shall be two members. Page 153 of 370

155 Policy on Disclosures and Internal Procedure for Prevention of Insider Trading We will comply with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended, post listing of our Company s shares on the Stock Exchange. Pratim Ramani, Company Secretary & Compliance Officer, is responsible for setting forth policies, procedures, monitoring and adhering to the rules for the prevention of dissemination of price sensitive information and the implementation of the code of conduct under the overall supervision of the Board. ORGANIZATIONAL STRUCTURE KEY MANAGERIAL PERSONNEL Our Company is managed by our Board of Directors, assisted by qualified professionals, who are permanent employees of our Company. Below are the details of the Key Managerial Personnel of our Company: Shailendrasingh Patil Shailendrasingh Patil, aged 34 years, is Chief Financial Officer of our Company. He holds Bachelors Degree in Commerce from Veer Narmad South Gujarat University. He has completed dual specialisation in the field of finance and Marketing from Global Business School, Jalgaon. He has an experience of more than 5 years in the field of Finance. He has been promoted as Chief Financial Officer of our Company on March 25, Our Company paid Rs Lakhs as remuneration to him during the financial year Pratim Ramani Pratim Ramani, aged 26 years is the Company Secretary and Compliance Officer of our Company. He holds Bachelors Degree in Commerce from University of Mumbai. He is a qualified Company Secretary. He has joined our Company on March 25, Since, he has joined our Company on March 25, Our Company has not paid any remuneration to him in the financial year Page 154 of 370

156 OUR PROMOTERS OUR PROMOTER AND PROMOTER GROUP Our Company has been promoted by Mr. Shantilal Patel and Mr. Pradeep Navik. Brief profile of our individual Promoters is as under: Mr. Shantilal Patel, aged 58 years, is currently the Chairman and Managing Director of our Company. He has been director since incorporation. He was originally in engineering business with an experience of more than 20 years in steel fabrication. Later he diversified his interest in aquaculture and gained rich experience of 15 years in the field of shrimp farming. His tech savvy mindset, immensely contributed towards development of best infrastructure by adopting innovative method in aquaculture farming field. He is responsible for making strategic decisions and decisions relating to business development of the Company. He has been awarded most talented Aqua Farmer & Performer Award for the highest production in shrimp farming and is a spoke s person in Surat Aquaculture Farmers Association (SAFA). He started the concept of P.E. Lined Ponds in Gujarat. Passport No: H Driving License: GJ Voters ID: CTL Address: 46 and 47, Hariohm Nagar, Rander, Surat , Gujarat. For further details relating to Mr. Shantilal Patel, including terms of appointment as our Chairman & Managing Director and other directorships, please refer to the chapter titled Our Management beginning on page 143 of this Draft Prospectus. Page 155 of 370

157 Pradeep Navik, aged 53 years, is currently the Whole-time Director of our Company. He has been director since incorporation. He has over 20 years of experience in Aquaculture industry. He is responsible for providing technical support to the employees of the Company and also looks after the financial functions of the Company. He introduced the concept of Satellite Farming in our Company. He is President of Surat Aqua Farmers Association (SAFA) and also Vic-President of Gujarat Aquaculture Association (GAA). Passport No: G Driving License: GJ Voters ID: GJ/24/168/ Address: 14-15, Sugam Society, Rander Road, Adajan Patia, Surat , Gujarat. For further details relating to Pradeep Navik, including terms of appointment as our Whole-time Director and other directorships, please refer to the chapter titled Our Management beginning on page 143 of this Draft Prospectus. DECLARATION Our Company confirms that the permanent account number, bank account number and passport number of our Promoters shall be submitted to the Stock Exchange at the time of filing of this Draft Prospectus with it. Our Promoters and the members of our Promoter Group have not been debarred from accessing the capital markets under any order or direction passed by SEBI or any other regulatory or governmental authority. None of our Promoters was or also is a promoter, director or person in control of any other company which is debarred from accessing the capital market under any order or directions made by the SEBI. Further, neither our Promoters, the relatives of our Promoters (as defined under the Companies Act) nor our Group Companies have been declared as a wilful defaulter by the RBI or any other government authority and there are no violations of securities laws committed by our Promoters in the past and no proceedings for violation of securities laws are pending against him. INTEREST OF PROMOTERS Interest in promotion of our Company Our Promoters may be deemed to be interested in the promotion of the Company to the extent of the Equity Shares held by them and also to the extent of any dividend payable to them and other distributions in respect of the aforesaid Equity Shares. For further details, refer to chapter titled Related Party Transactions beginning on page 171 of this Draft Prospectus. In addition, our Promoters and Directors, Page 156 of 370

158 Mr. Shantilal Patel and Mr. Pradeep Navik are deemed to be interested to the extent of remuneration and reimbursement of expenses, if any, payable in terms of the agreements/resolutions entered into by, with our Company and under our Articles of Association. Interest in the property of our Company Our Promoters do not have any other interest in any property acquired by our Company in a period of two years before filing of this Draft Prospectus or proposed to be acquired by us as on date of filing the Prospectus with RoC. Please refer paragraph titled Property on page 124 of this Draft Prospectus for further details. Interest as member of our Company As on date of this Draft Prospectus, our Promoters together hold 8,63,360 Equity Shares in our Company (excluding the Equity Shares jointly held with other shareholders) i.e % of the pre Issue paid up Equity Share capital of our Company. Therefore, our Promoters are interested to the extent of their respective shareholding and the dividend declared, if any, by our Company. Interest as a creditor of our Company As on the date of this Draft Prospectus, our Company has not availed any loans from the Promoters of our Company. For further details, refer to chapter titled Related Party Transactions beginning on page 171 of this Draft Prospectus. Interest as Director of our Company Mr. Shantilal Patel and Pradeep Navik as given in the chapters titled Our Management, Financial Statements and Capital Structure beginning on pages 143, 173 and 56 of this Draft Prospectus our Promoters / Directors, may be deemed to be interested to the extent of remuneration and/or reimbursement of expenses payable to them for services rendered to us in accordance with the provisions of the Companies Act and in terms of agreements entered into with our Company, if any and AoA of our Company. Interest in transactions involving acquisition of land Our Promoters are not currently interested in any transaction with our Company involving acquisition of land. Except as stated/referred to in the heading titled Properties beginning on page 124 of the Draft Prospectus, our Promoter s have not entered into any contract, agreement or arrangements in relation to acquisition of property, since incorporation in which the Directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed to be made to them. OTHER VENTURES OF OUR PROMOTERS Save and except as disclosed in the chapter titled Our Group Entities beginning on page 161 of this Draft Prospectus, there are no other ventures of our Promoters in which they have business interests/other interests. RELATED PARTY TRANSACTIONS For details of related party transactions entered into by our Company, please refer to the Details of Related Party Transactions as restated, appearing as Annexure XVII of the section titled Financial Statements beginning on page 173 of this Draft Prospectus. Page 157 of 370

159 OUR PROMOTER GROUP Our Promoter Group in terms of Regulation 2(1)(zb) of the SEBI (ICDR) Regulations is as under: A. Individuals related to our Promoter: Relationship with Promoters Shantilal Patel Pradeep Navik Father Ishwar Patel Ratilal Navik Mother Rama Patel Manjula Navik Spouse Rashmiben Patel Susanben Navik Son Dhaval Patel Rohan Navik Daughter Kimi Navik - Preety Mistry Spouse s Father Parbhu Patel Ralph Moses Spouse s Mother Rami Patel Mary Moses Spouse s Brother Dharmen Bhagwakar - Spouse s Sister Niru Patel - Usha Patel *Due to family understanding and restructuring, persons as mentioned below, who fall under regulation 2(1)(zb) of SEBI (ICDR) Regulation are excluded from the purview of Promoter Group. Further the entities falling under the definition of Promoter Group on account of being related to the below mentioned persons are also excluded. A declaration has been taken in this regard. Sr. No. Persons excluded from Promoter Group Relation with Promoter 1. Manoj Patel Brother of Shantilal Patel 2. Kiran Patel Brother of Shantilal Patel 3. Mina Roy Sister of Shantilal Patel 4. Sharda Patel Sister of Shantilal Patel 5. Bharat Navik Brother of Pradeep Navik 6. Leela Khalasi Sister of Pradeep Navik 7. Bhanu Navik Sister of Pradeep Navik B. Companies, firms, proprietorships and HUFs which form part of our Promoter Group are as follows: a. Agni Aqua Farm b. S R Aqua Farm c. Shanti Aqua d. Pruthvi Aqua Farm e. Vayu Aqua Farm f. Preety Aqua Fam g. Dhaval Aqua Farm h. Akash Aqua Farm i. Jal Aqua Farm j. Kimi Aqua Farm k. Rohan Aqua Farm l. Tapi Aqua Farm m. Darshan Aqua Farm n. Deep Aqua Farm o. Dilip Aqua Farm p. Dinkar Aqua Farm Page 158 of 370

160 q. Divy Aqua Farm r. Manju Aqua Farm s. Mukesh Hotels Private Limited t. Jacob Foods Private Limited u. Rati Aqua Private Limitedy v. Navik Aqua Private Limited w. Susan Aqua Private Limited x. Goldpink Aqua Culture Private Limited y. Bright Commotrade Private Limited z. Usha Aqua Farm Private Limited aa. King Marine Products Private Limited bb. Agave Tradecom LLP (formerly Agave Tradecom Private Limited) RELATIONSHIP OF PROMOTERS WITH OUR DIRECTORS Mr. Pradeep Navik and Mr. Shantilal Patel are related to Mr. Rohan Navik as Father and Father-in-law respectively. Hence they are relatives within the meaning of Section 2 (77) of the Companies Act, CHANGES IN OUR PROMOTERS Our Promoters are the original promoters of our Company and there has not been any change in the management or control of our Company. COMPANIES / FIRMS FROM WHICH ANY OF THE PROMOTER HAS DISASSOCIATED HIMSELF IN LAST 3 (THREE) YEARS Except as mentioned below, none of our Promoters have disassociated themselves from any of the companies, firms or other entities during the last three years preceding the date of the Draft Prospectus: Sr. No. Shantilal Patel Pradeep Navik Reason for Disassociation 1. Shanti Aqua Narmada Aqua Farm Dissolution of Partnership Firm Sai Jala Aqua Farm Retirement from Partnership Shiv Dham Aqua Farm Retirement from Partnership Shiv Shakti Aqua Farm Retirement from Partnership Mahadev Aqua Farm Retirement from Partnership Satyanarayan Exhibitors Retirement from Partnership COMMON PURSUITS OF OUR PROMOTER The Promoters do not have interest in any venture that is involved in any activities similar to those conducted by our Company. CONFIRMATIONS For details on litigations and disputes pending against the Promoters and defaults made by them, please refer to the section titled Outstanding Litigation and Material Developments beginning on page 234 of this Draft Prospectus. Our Promoters has not been declared a wilful defaulter by RBI or any other Page 159 of 370

161 governmental authority and there are no violations of securities laws committed by our Promoters in the past or are pending against them. Our Promoters and the members of our Promoter Group have not been debarred from accessing the capital markets under any order or direction passed by SEBI or any other regulatory or governmental authority. None of our Promoters was or also is a promoter, director or person in control of any other company which is debarred from accessing the capital market under any order or directions made by the SEBI. Page 160 of 370

162 OUR GROUP ENTITIES No equity shares of our Group Companies are listed on any stock exchange and it has not made any public or rights issue of securities in the preceding three years. OUR GROUP ENTITY The details of our group entity are mentioned below: Sr. No Name of Group Entity Agni Aqua Farm Akash Aqua Farm Dhaval Aqua Farm Jal Aqua Farm 5. Pruthvi Aqua Farm 6. Preety Aqua Farm 7. S R Aqua Farm 8. Vayu Aqua Farm 9. Rohan Aqua Farm 10. Tapi Aqua Farm Mukesh Hotels Private Limited Rati Aqua Private Limited 13. Jacob Foods Private Limited Type of Group Entity Partnership Firm Partnership Firm Partnership Firm Partnership Firm Partnership Firm Partnership Firm Partnership Firm Partnership Firm Partnership Firm Partnership Firm Private Limited Company Private Limited Company Private Limited Company Brief Description of Business Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities Aqua Culture and allied activities To carry business of hotel, restaurant, café traven, motel, beerhouse, etc. To carry business of development of aqua farms for breeding of aquatic animals and set up research and development of breeds of aquatic animals To manufacture, process and prepare disinfectant, compound, mix, etc; to act Interest of the Promoters (%) Our Promoters share 60% of the profit or loss of the firm Our Promoters Shantilal Patel share 60% of the profit or loss of the firm Our Promoter, Shantilal Patel share 40% of the profit or loss of the firm Our Promoters share 60% of the profit or loss of the firm Our Promoters share 60% of the profit or loss of the firm Our Promoter, Shantilal Patel share 40% of the profit or loss of the firm Our Promoter, Shantilal Patel share 30% of the profit or loss of the firm Our Promoters share 60% of the profit or loss of the firm Our Promoter, Pradeep Navik share 40% of the profit or loss of the firm Our Promoter, Pradeep Navik share 10% of the profit or loss of the firm Our Promoter, Shantilal Patel directly holds 34% of the capital. 100% of the capital is held by Promoter and Promoter Group. Our Promoters directly holds 36.90% of the capital. 100% of the capital is held by Promoter and Promoter Group. Our Promoters directly holds 100% of the capital. Page 161 of 370

163 Sr. No Name of Group Entity Navik Aqua Private Limited Susan Aqua Private Limited Goldpink Aqua Culture Private Limited Bright Commotrade Private Limited 18. King Marine Products Private Limited Type of Group Entity Private Limited Company Private Limited Company Private Limited Company Private Limited Company Private Limited Company Brief Description of Business as job worker, representatives, consultants or deal in consumer goods, agricultural goods, etc; and to carry business of development of aqua farms for breeding of aquatic animals and set up research and development of breeds of aquatic animals To carry on aqua culture business To carry business of development of aqua farms for breeding of aquatic animals and set up research and development of breeds of aquatic animals To carry business of development of aqua farms for breeding of aquatic animals and set up research and development of breeds of aquatic animals Trading of all kinds of goods including consumer, agricultural, industrial etc. Shrimp Farming Interest of the Promoters (%) Our Promoters directly holds 36.61% of the capital. 100% of the capital is held by Promoter and Promoter Group. Our Promoters directly holds 35.72% of the capital. 100% of the capital is held by Promoter and Promoter Group. Our Promoters directly holds 36.32% of the capital. 100% of the capital is held by Promoter and Promoter Group. Our Promoters directly holds 81.48% of the capital. 100% of the capital is held by Promoter and Promoter Group. Our Promoter, Pradeep Navik holds 33.33% of the capital. Remaining capital is held by Public. Page 162 of 370

164 TOP FIVE GROUP COMPANIES Following are the details of our top five Group Companies on the basis of turnover (including indirect/other income), as per audited financials of FY Jacob Foods Private Limited ( JFPL ): JFPL was incorporated on December 12, 2000 under the Companies Act The registered office of JFPL is situated at At Olpad, GIDC, Room No. 2, Pl. No. 4 and 5, Ta Olpad, Surat The corporate identification number of JFPL is U51229GJ2000PTC JFPL is currently engaged in the business of development of aqua farms for breeding of aquatic animals. Capital Structure and Shareholding Pattern as on the date of this Draft Prospectus: JFPL has an authorized equity share capital of Rs. 1,00,000 divided into 10,000 equity shares of Rs. 10/- each and a paid-up share capital of 1,00,000 divided into 10,000 equity shares of Rs. 10/- each. The shareholding pattern of JFPL as on the date of the Draft Prospectus is as follows: Sr. No. Name of Shareholder Relation of Shareholder with our Company No. of Shares held Percentage of Shareholding (%) 1. Shantilal Patel Promoter 5,000 50% 2. Pradeep Navik Promoter 5,000 50% Financial Performance (Rs. In Lakhs) Particulars For the year ended Equity Capital (Rs per share) Reserves and Surplus (0.34) (0.78) Net Asset Value per equity shares (in Rs.) Board of Directors As on the date of Draft Prospectus, JFPL s Board of Directors consists of: Sr. No. Name of the Director Designation Date of Appointment 1. Shantilal Patel Director November 1, Rashmiben Patel Director November 1, Pradeep Navik Director November 1, Susanben Navik Director November 1, Arun Gautam Director December 12, 2000 Significant notes There are no qualification provided by the auditor during financial year JFPL does not have negative net-worth during for the financial year , and JFPL has not made any right/public issue so far. Further, JFPL is not sick company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 nor under winding up. Page 163 of 370

165 2. Rati Aqua Private Limited ( RAPL ): RAPL was incorporated on June 18, 2010 under the Companies Act The registered office of RAPL is situated at At Olpad, GIDC, Room No. 1, Pl No. 4 and 5, Ta Olpad, Surat The corporate identification number of RAPL is U05004GJ2010PTC RAPL is currently engaged in the business of engaged in the business of development of aqua farms for breeding of aquatic animals. Capital Structure and Shareholding Pattern as on the date of this Draft Prospectus: RAPL has an authorized equity share capital of Rs. 65,00,000 divided into 6,50,000 equity shares of Rs. 10/- each and a paid-up share capital of 56,00,000 divided into 5,60,000 equity shares of Rs. 10/- each. The shareholding pattern of RAPL as on the date of the Draft Prospectus is as follows: Sr. No. Name of Shareholder Relation of Shareholder with our Company No. of Shares held Percentage of Shareholding (%) 1. Shantilal Patel Promoter 1,03, Pradeep Navik Promoter 1,03, Rashmiben Patel Promoter Group 1,00, Susanben Navik Promoter Group 1,00, Rohan Navik Promoter Group 1,03, Angoora Tradefin Private Limited 7. P.G. Commercial Private Limited 8. Anupam Advisory Private Limited 9. Sidlaw Commercials Private Limited 10. Dicco Transport Corporation Limited Financial Performance , , , , , (Rs. In Lakhs) Particulars For the year ended Equity Capital (Rs. 10 per share) Reserves and Surplus Net Asset Value per equity shares (in Rs.)* *NAV calculation excluded preference share capital issued by RAPL. Page 164 of 370

166 Board of Directors As on the date of Draft Prospectus, RAPL s Board of Directors consists of: Sr. No. Name of the Director Designation Date of Appointment 1. Shantilal Patel Director June 18, Pradeep Navik Director June 18, Rohan Navik Director June 18, 2010 Significant notes There are no qualification provided by the auditor during financial year RAPL does not have negative net-worth during for the financial year , and RAPL has not made any right/public issue so far. Further, RAPL is not sick company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 nor under winding up. 3. S R Aqua Farm S R Aqua Farm, is a partnership firm formed under the Partnership Act, 1932 vide a partnership deed dated April 1, 2003, wherein Mr. Chhagan Bhagwagar, Mr. Pravin Bhagwagar, M/s. Rambhai Thakorbhai HUF, Ms. Seema Desai and Mr. Natvarlal Khalasi were original partners. On April 1, 2008 vide Deed for change in Partnership, M/s. Rambhai Thakorbhai HUF, Mrs. Seema Desai and Mr. Natvarlal Khalasi retired as partners; while Mr. Shantilal Patel, Mr. Rohan Navik and Mr. Milinkumar Pote were admitted as partners. Its office is situated at Plot No. 13, Block No. 846, At & Post Mor, Olpad, Surat S R Aqua Farm is authorized to engage in manufacturing and trading activities of aqua produce, its ancillaries and such other business at the liberty of the Partners, mutually decided from time to time. It is currently deriving rental income by letting out ponds. As on the date of the Draft Prospectus, S R Aqua Farm has five partners viz. Mr. Shantilal Patel, Mr. Rohan Navik, Mr. Milinkumar Pote, Mr. Chhagan Bhagwagar and Mr. Pravin Bhagwagar. Profit and Loss Sharing Ratio The profit and loss sharing ratio of the partners in the firm is as follows: Sr. No. Name of the Partner Profit and loss sharing 1. Shantilal Patel 30% 2. Rohan Navik 30% 3. Milinkumar Pote 30% 4. Chhagan Bhagwagar 5% 5. Pravin Bhagwagar 5% Financial Performance (Rs. In Lakhs) For the year ended Particulars Partner s Capital / Networth Sales and Indirect / Other Income 7.18 Page 165 of 370

167 For the year ended Particulars Profit / (Loss) after tax Tapi Aqua Farm Tapi Aqua Farm, is a partnership firm formed under the Partnership Act, 1932 vide a partnership deed dated January 8, 2003, wherein Mr. Pradeep Navik, Mr. Vasant Safari, Mrs. Dharmishtra Safari, Mr. Manoj Sharma, Mrs. Vidya Sharma and Ms. Ilmas Anis were original Partners; and Mr. Rohan Navik (Minor) was admitted for sharing profit only. On May 13, 2005 vide Deed for change in Partnership, Mr. Dinesh Patel and Mrs. Susanben Navik were admitted as partners; Mr. Rohan Navik was admitted as party to deed and Ms. Ilmas Anis retired as partner. Further, on April 1, 2009, Mr. Vasant Safari, Mrs. Dharmishtra Safari and Mrs. Vidya Sharma retired as partners. Its office is situated at Mor, Olpad, Surat Tapi Aqua Farm is authorised to engage in business of and processing activity of aqua products, its ancillaries and such other business at the liberty of the Partners, mutually decided from time to time. It is currently deriving rental income by letting out ponds. As on the date of the Draft Prospectus, Tapi Aqua Farm has five partners viz. Mr. Pradeep Navik, Mrs. Susanben Navik, Mr. Rohan Navik, Mr. Manoj Sharma and Mr. Dinesh Patel. Profit and Loss Sharing Ratio The profit and loss sharing ratio of the partners in the firm is as follows: Sr. No. Name of the Partner Profit and loss sharing 1. Pradeep Navik 10% 2. Susanben Navik 30% 3. Rohan Navik 50% 4. Manoj Sharma 5% 5. Dinesh Patel 5% Financial Performance (Rs. In Lakhs) Particulars For the year ended Partner s Capital / Networth (50.71) (29.50) Sales and Indirect / Other Income Profit / (Loss) after tax (0.01) Rohan Aqua Farm Rohan Aqua Farm, is a partnership firm formed under the Partnership Act, 1932 vide a partnership deed. On August 1, 2011, Mr. Vicky Khalasi was admitted as partner. Its office is situated at Dandi, Olpad, Surat. Rohan Aqua Farm is authorised to engage in manufacturing and trading activities of aqua produce, its ancillaries and such other business at the liberty of the Partners, mutually decided from time to time. It is currently deriving rental income by letting out ponds. Page 166 of 370

168 As on the date of the Draft Prospectus, Rohan Aqua Farm has seven partners viz. Lila Khalasi, Pradeep Navik, Bhanumati Navik, Madhu Khalasi, Ashok Khalasi, Kanti Khalasi and Vicky Khalasi. Profit and Loss Sharing Ratio The profit and loss sharing ratio of the partners in the firm is as follows: Sr. No. Name of the Partner Profit and loss sharing 1. Lila Khalasi 20% 2. Pradeep Navik 40% 3. Bhanumati Navik 10% 4. Madhu Khalasi 10% 5. Ashok Khalasi 5% 6. Kanti Khalasi 5% 7. Vicky Khalasi 10% Financial Performance (Rs. In Lakhs) Particulars For the year ended Partner s Capital / Networth Sales and Indirect / Other Income Profit / (Loss) after tax Except as mentioned above, as on the date of filing the Draft Prospectus, as required under SEBI ICDR Regulations, our Company has no Group Entity or any other venture which is promoted by our Promoters. CONFIRMATION Our Promoter and persons forming part of Promoter Group have confirmed that they have not been declared as wilful defaulters by the RBI or any other governmental authority and there are no violations of securities laws committed by them in the past and no proceedings pertaining to such penalties are pending against them. Additionally, none of the Promoter and persons forming part of Promoter Group has been restrained from accessing the capital markets for any reasons by SEBI or any other authorities. Except as disclosed in this chapter, our Group Entity does not have negative net worth as of the date of the respective last audited financial statements. LITIGATION For details on litigations and disputes pending against the Promoter and Group entities and defaults made by them, please refer to the chapter titled Outstanding Litigations and Material Developments on page 234 of this Draft Prospectus. Page 167 of 370

169 DISASSOCIATION BY THE PROMOTER IN THE LAST THREE YEAR Except as mentioned below, none of our Promoters have disassociated themselves from any of the companies, firms or other entities during the last three years preceding the date of the Draft Prospectus: Sr. No. Shantilal Patel Pradeep Navik Reason for Disassociation 1. Shanti Aqua Mahadev Aqua Farm Retirement from Partnership Sai Jala Aqua Farm Retirement from Partnership Shiv Dham Aqua Farm Retirement from Partnership Shiv Shakti Aqua Farm Retirement from Partnership Narmada Aqua Farm Dissolution of Partnership Firm Satyanarayan Exhibitors Retirement from Partnership NEGATIVE NET WORTH Our Group Entity, M/s. King Marine Products Private Limited, has negative networth as on March 31, The Company is in the process of filing strike off with the Registrar of Companies. Details of King Marine Products Private Limited ( KMPPL ): KMPPL was incorporated on June 2, 2005 under the Companies Act The registered office of KMPPL is situated at C-2, Seema Nagar Society, Opp Sai Krupa Bus Stand, Rander Road, Surat The corporate identification number of KMPPL is U05000GJ2005PTC KMPPL is currently engaged in the business of Shrimp Farming. Capital Structure and Shareholding Pattern as on the date of this Draft Prospectus: KMPPL has an authorized equity share capital of Rs. 10,00,000 divided into 1,00,000 equity shares of Rs. 10/- each and a paid-up share capital of 3,00,000 divided into 30,000 equity shares of Rs. 10/- each. The shareholding pattern of KMPPL as on the date of the Draft Prospectus is as follows: Sr. No. Name of Shareholder Relation of Shareholder with our Company No. of Shares held Percentage of Shareholding (%) 1. Pradeep Navik Promoter 10, % 2. Kamlesh Gupta -- 10, % 3. Manoj Sharma -- 10, % Financial Performance (Rs. In Lakhs) Particulars For the year ended Equity Capital (Rs. 10 per share) Reserves and Surplus (7.03) (8.40) (7.21) Net Asset Value per equity shares (in Rs.) (13.42) (14.03) (17.99) Page 168 of 370

170 Board of Directors As on the date of Draft Prospectus, KMPPL s Board of Directors consists of: Sr. No. Name of the Director Designation Date of Appointment 1. Pradeep Navik Director June 2, Manoj Sharma Director June 2, Kamlesh Gupta Director June 2, 2005 Except as disclosed in this chapter, none of our Group Entity have negative net worth as on the date of the Draft Prospectus. However, negative partner s capital in some of the partnership firms forming part of our group entities reflects excessive withdrawals by Partners. DEFUNCT / STRUCK-OFF COMPANY Our Group Entity, M/s. King Marine Products Private Limited, has negative networth as on March 31, The Company has passed resolution dated October 31, 2014 for striking off the name of the Company and the Company is in process of filing application with the Registrar of Companies as the Company is not carrying on any business. Except as disclosed in this chapter, none of our Promoters or Promoter Group or Group Company has become defunct or strike off in the five years preceding the filing of this Draft Prospectus. INTERESTS OF OUR GROUP COMPANY AND ASSOCIATE COMPANY We do not have any associate companies and all our Group Companies are interested to the extent of their shareholding of Equity Shares from time to time, for which they are entitled to receive the dividend declared, if any, by our Company. Further, our Company has entered into contract farming with partnership entities for the purpose of Shrimp Farming for which collaboration agreement has been entered into; hence the group entities may be interested to the extant of income derived from our Company by them. For details refer chapters titled Related Parties Transactions, Financial Indebtedness, Our Promoters and Promoter Group and Our Business beginning from pages 171, 220, 155 and 110 respectively of Draft Prospectus. RELATED PARTY TRANSACTIONS For details on our related party transactions please refer to the paragraph titled Our Properties in chapter titled Our Business beginning on page 110 of this Draft Prospectus, paragraph titled Interest of Directors in the chapter titled Our Management beginning on page 143 of this Draft Prospectus and Annexure XVII - Related Party Transactions in chapter titled Financial Statements beginning on page 173 of this Draft Prospectus and paragraph titled Interest of Promoters under this chapter. Page 169 of 370

171 COMMON PURSUITS Except as stated in this Chapter, none of our Group Entities have objects similar to that of our Company s business. Further the Company do not have any subsidiary or associate company. Currently we do not have any non-compete agreement/arrangement with any of our Group Entity. Such a conflict of interest may have adverse effect on our business and growth. We shall adopt the necessary procedures and practices as permitted by law to address any conflict situations, as and when they may arise. SIGNIFICANT ADVERSE FACTORS Our Group entity M/s. Agni Aqua Farm, M/s. Mukesh Hotels Private Limited, M/s. Navik Aqua Private Limited, M/s. Susan Aqua Private Limited, M/s. Goldpink Aqua Culture Private Limited and M/s. King Marine Products Private Limited, has made loss in the immediately previous year SALES/PURCHASES BETWEEN OUR COMPANY AND PROMOTER COMPANY & GROUP ENTITIES Other than as disclosed in the chapter titled Related Party Transactions on page 171 of this Draft Prospectus, there are no sales/purchases between the Company and the group companies where such sales or purchases exceed in value in the aggregate 10 per cent of the total sales or purchases of the Company. PAYMENT OR BENEFIT TO OUR GROUP ENTITIES Except as stated in chapter titled Related Party Transactions beginning on page 171 of this Draft Prospectus, there has been no payment of benefits to our Group Entities in financial period ended December 31, 2014 and financial years ended 2014, 2013, 2012, 2011 and 2010, nor is any benefit proposed to be paid to them as on the date of this Draft Prospectus. Page 170 of 370

172 RELATED PARTY TRANSACTIONS For details on Related Party Transaction of our Company, please refer to Annexure XVII of Restated Financial Statement under the Section titled Financial Statement beginning on page 173 of this Draft Prospectus Page 171 of 370

173 DIVIDEND POLICY Under the Companies Act, our Company can pay dividends upon a recommendation by our Board of Directors and approval by a majority of the shareholders at the Annual General Meeting. The shareholders of our Company have the right to decrease not to increase the amount of dividend recommended by the Board of Directors. The dividends may be paid out of profits of our Company in the year in which the dividend is declared or out of the undistributed profits or reserves of previous fiscal years or out of both. The Articles of Association of our Company also gives the discretion to our Board of Directors to declare and pay interim dividends. The declaration and payment of dividend will be recommended by our Board of Directors and approved by the shareholders of our Company at their discretion and will depend on a number of factors, including the results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions, applicable Indian legal restrictions and other factors considered relevant by our Board of Directors. Our Company has no formal dividend policy. The amounts paid as dividends in the past are not necessarily indicative of the Company s dividend policy or dividend amounts, if any, in the future. Investors are cautioned not to rely on past dividends as an indication of the future performance of the Company or for an investment in the Equity Shares. Our Company has not declared any dividend on the Equity Shares in the last five fiscal years Page 172 of 370

174 SECTION V FINANCIAL STATEMENTS FINANCIAL STATEMENT AS RESTATED Independent Auditor s Report for the Restated Financial Statements of Zeal Aqua Limited (Formally known as Zeal Aqua Private Limited) The Board of Directors Zeal Aqua Limited (Formally known as Zeal Aqua Private Limited) Plot No.04/05, Olpad G.I.D.C, Nr. Olpad Ice Factory, Olpad, Surat Dear Sirs, 1. We have examined the attached Restated Statement of Assets and Liabilities of Zeal Aqua Limited (the Company) [Formally known as Zeal Aqua Private Limited]as at December 31, 2014, March 31, 2014, March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 and the related Restated Statement of Profit & Loss and Restated Statement of Cash Flow for the financial period/year ended on December 31, 2014, March 31, 2014, March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 (collectively the Restated Summary Statements or Restated Financial Statements ). These Restated Summary Statements have been prepared by the Company and approved by the Board of Directors of the Company in connection with the Initial Public Offering (IPO) in SME Platform of BSE Limited ( BSE ) 2. These Restated Summary Statements have been prepared in accordance with the requirements of: (i) (ii) Part I of Chapter III to the Companies Act, 2013 ( Act ); The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009 ( ICDR Regulations ) issued by the Securities and Exchange Board of India ( SEBI ) in pursuance to Section 11 of the Securities and Exchange Board of India Act, 1992 and related amendments / clarifications from time to time; (iii) The terms of reference to our engagements with the Company letter dated 1 st December 2014 requesting us to carry out the assignment, in connection with the Draft Prospectus/ Prospectus being issued by the Company for its proposed Initial Public Offering of equity shares in SME Platform of BSE Limited ( IPO or SME IPO ); and (iv) The Guidance Note on Reports in Company Prospectus (Revised) issued by the Institute of Chartered Accountants of India ( Guidance Note ). Page 173 of 370

175 3. The Restated Summary Statements of the Company have been extracted by the management from the Audited Financial Statements of the Company for the financial period/year ended on December 31, 2014, March 31, 2014, March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 which have been approved by the Board of Directors. 4. In accordance with the requirements of Part I of Chapter III of Act, ICDR Regulations, Guidance Note and Engagement Letter, we report that: (i) The Restated Statement of Assets and Liabilities as set out in Annexure I to this report, of the Company as at December 31, 2014, March , March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 are prepared by the Company and approved by the Board of Directors. These Statement of Assets and Liabilities, as restated have been arrived at after making such adjustments and regroupings to the individual financial statements of the Company, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to the Restated Summary Statements as set out in Annexure IV to this Report. (ii) The Restated Statement of Profit and Loss as set out in Annexure II to this report, of the Company for the financial period/year ended on December 31, 2014, March , March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 are prepared by the Company and approved by the Board of Directors. These Statement of Profit and Loss, as restated have been arrived at after making such adjustments and regroupings to the individual financial statements of the Company, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to the Restated Summary Statements as set out in Annexure IV to this Report. (iii) The Restated Statement of Cash Flow as set out in Annexure III to this report, of the Company for the financial period/year ended on December 31, 2014, March , March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 are prepared by the Company and approved by the Board of Directors. These Statement of Cash Flow, as restated have been arrived at after making such adjustments and regroupings to the individual financial statements of the Company, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to Restated Summary Statements as set out in Annexure IV to this Report. 5. Based on the above, we are of the opinion that the Restated Financial Statements have been made after incorporating: a) Adjustments for the changes in accounting policies retrospectively in respective financial years/period to reflect the same accounting treatment as per the changed accounting policy for all reporting periods. b) Adjustments for prior period and other material amounts in the respective financial years/period to which they relate and there are no qualifications which require adjustments. c) There are no extra-ordinary items that need to be disclosed separately in the accounts and qualifications requiring adjustments. d) There were no qualifications in the Audit Reports issued by the Statutory Auditors for the financial period/year ended on December 31, 2014, March , March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 which would require adjustments in this Restated Financial Statements of the Company. e) These Profits and Losses have been arrived at after charging all expenses including depreciation and after making such adjustments/restatements and regroupings as in our opinion are appropriate and are to be read in accordance with the Significant Accounting Page 174 of 370

176 Polices and Notes to Restated Summary Statements as set out in Annexure IV to this report. 6. Audit for the financial year ended March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 was conducted by M/s. Modh & Co., Chartered Accountants and accordingly reliance has been placed on the financial information examined by them for the said years. The financial report included for these years is based solely on the report submitted by them. The financial statements for the period/year ended December 31, 2014 and March 31, 2014 have been audited by us i.e. M/s. Pary & Co. 7. We have also examined the following other financial information relating to the Company prepared by the Management and as approved by the Board of Directors of the Company and annexed to this report relating to the Company for the financial period/year ended on December 31, 2014, March , March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 proposed to be included in the Draft Prospectus/Prospectus ( Offer Document ). Annexure of Restated Financial Statements of the Company:- a. Significant Accounting Policies in Annexure IV; b. Details of Share Capital as Restated as appearing in ANNEXURE V to this report; c. Details of Reserves and Surplus as Restated as appearing in ANNEXURE VI to this report; d. Details of Long Term Borrowings as Restated as appearing in ANNEXURE VII to this report; e. Details of Long Term Provisions as Restated as appearing in ANNEXURE VIII to this report; f. Details of Other Current Liabilities as Restated as appearing in ANNEXURE IX to this report; g. Details of Short Term Provisions as Restated as appearing in ANNEXURE X to this report; h. Details of Short Term Borrowings as Restated as appearing in ANNEXURE XI to this report; i. Details of Non-Current Investments as Restated as appearing in ANNEXURE XII to this report; j. Details of Long Term Loans & Advances as Restated as appearing in ANNEXURE XIIII to this report; k. Details of Other Non-Current Assets as Restated as appearing in ANNEXURE XIV to this report; l. Details of Inventories as Restated as appearing in ANNEXURE XV to this report; m. Details of Trade Receivables as Restated enclosed as ANNEXURE XVI to this report; n. Details of Short Term Loans & Advances as Restated as appearing in ANNEXURE XVII to this report; o. Details of Other Current Assets as Restated as appearing in ANNEXURE XVIII to this report; p. Details of Other Income as Restated as appearing in ANNEXURE XIX to this report; q. Capitalization Statement as Restated as at December 31, 2014 as appearing in ANNEXURE XX to this report; r. Statement of Tax Shelters as Restated as appearing in ANNEXURE XXI to this report; s. Details of Related Parties Transactions with the Directors as Restated as appearing in ANNEXURE XXII to this report; Page 175 of 370

177 t. Details of Significant Accounting Ratios as Restated as appearing in ANNEXURE XXIII to this report u. Reconciliation of Restated Profit as appearing in ANNEXURE XXIV to this report. 8. We, Pary & Co., have been subjected to the peer review process of the Institute of Chartered Accountants of India ( ICAI ) and hold a valid peer review certificate issued by the Peer Review Board of the ICAI. 9. The preparation and presentation of the Financial Statements referred to above are based on the Audited financial statements of the Company and are in accordance with the provisions of the Act and ICDR Regulations. The Financial Statements and information referred to above is the responsibility of the management of the Company. 10. The report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports issued by any other Firm of Chartered Accountants nor should this report be construed as a new opinion on any of the financial statements referred to therein. 11. We have no responsibility to update our report for events and circumstances occurring after the date of the report. 12. In our opinion, the above financial information contained in Annexure I to XXI of this report read with the respective Significant Accounting Polices and Notes to Restated Summary Statements as set out in Annexure IV are prepared after making adjustments and regrouping as considered appropriate and have been prepared in accordance with the Act, ICDR Regulations, Engagement Letter and Guidance Note. 13. Our report is intended solely for use of the management and for inclusion in the Offer Document in connection with the SME IPO. Our report should not be used, referred to or adjusted for any other purpose except with our consent in writing. For Pary & Co, Chartered Accountants Firm Registration No: C Akash R. Gaglani Partner Membership No.: Date: 31 st March Place: Surat Page 176 of 370

178 STATEMENT OF ASSETS AND LIABILITIES AS RESTATED Sr. No. 1) 2) 3) 4) ANNEXURE I (Rs. in Lakhs) Particulars As at March 31, As at December , 2014 Equity & Liabilities Shareholders funds a. Share capital b. Reserves & surplus c. Share Application Money Non-current liabilities a. Long term borrowings b.long term Provisions c. Deferred tax liabilities (net) Current liabilities a. Trade payables b. Other current liabilities c. Short term provisions d.short Term Borrowings T O T A L (1+2+3) Non-current assets a. Fixed assets i. Tangible assets ii. Intangible assets iii.capital work in progress b.non-current investment c. Deferred tax assets (net) Page 177 of 370

179 Sr. No. Particulars d. Long term loans & advances e. Other noncurrent assets As at March 31, As at December 31, ) Current assets a. Inventories b. Trade receivables c. Cash and cash equivalents d. Short term loans & advances e. Other current assets T O T A L (4+5) Page 178 of 370

180 STATEMENT OF PROFIT AND LOSS AS RESTATED ANNEXURE Ii (Rs. in Lakhs) Particulars As at March 31, As at December , 2014 INCOME Revenue from Operations Other income Total revenue (A) EXPENDITURE Purchase of stockin-trade Changes in inventories of finished goods, (46.40) (21.55) 7.70 (6.85) (19.19) traded goods and work-in-progress Employee benefit expenses Finance costs Depreciation and amortization expense Other expenses Total expenses (B) Profit before tax (A-B) Prior period items (net) Profit before exceptional, extraordinary items and tax Exceptional items Profit before extraordinary items and tax Extraordinary items Profit before tax Tax expense: (i) Current tax (ii) Deferred tax (asset)/liability Total tax expense Page 179 of 370

181 Particulars Profit for the year/ period Earning per equity share(face value of Rs. 10/- each):basic and diluted (Rs.) Adjusted earning per equity share(face value of Rs. 10/- each): Basic and diluted (Rs.) As at March 31, As at December 31, Page 180 of 370

182 STATEMENT OF CASH FLOW AS RESTATED Particulars Cash flow from operating activities: Net profit before tax as per statement of profit and loss As at March 31, ANNEXURE III (Rs. in Lakhs) As at Decembe r 31, Adjusted for: Preliminary expenses Provision for gratuity Depreciation & amortization Interest & Finance Cost Profit on sale of Fixed (2.53) - Assests Interest Income on FD - (6.24) - - (14.65) - Profit on Sale of MF (2.04) Loan Processing Fees Operating profit before working capital changes Adjusted for: Increase in inventories (46.40) (21.54) 7.70 (6.85) (19.19) (Increase)/ decrease in trade receivables (Increase)/ decrease in loans and advances and other assets (771.64) (339.29) ( ) ( ) (42.56) (168.44) (226.99) (808.43) (608.86) Increase/ (decrease) in liabilities & provisions (86.60) Increase/ (decrease) in trade payables Cash generated from operations (730.80) (118.05) Direct tax paid (5.37) (34.88) (1.53) (0.87) (87.19) (150.00) Net cash flow from operating activities (A) (736.17) (152.93) Cash flow from investing activities: Purchase of fixed assets (18.64) (167.19) (593.38) (174.36) (37.44) (290.56) Sale of Fixed Assets Investments in WIP - (66.39) (174.55) Proceeds from Long-term Loans &Advances (0.29) - - Security Deposits Given (14.73) - Loans & advances given to Others (2.59) - Investment in FD (152.08) - - Page 181 of 370

183 Particulars As at March 31, As at Decembe r 31, 2014 Interest Income on FD Purchase of Investments - - (10.09) - (311.35) (53.19) Profit on sale of MF Net cash flow used in investing activities (B) (16.61) (227.35) (589.98) (326.73) (346.72) (518.30) Cash flow from financing activities: Proceeds from issue of equity shares Proceeds from Long Term Borrowings (37.31) Repayment of Loans & ( (16.40) (269.68) - - Advances 5) (4.59) Application Money Refunded - - (13.00) Loan Processing Fees Incurred (45.13) - Finance Cost (35.33) (139.80) (281.26) (362.50) (303.00) (364.46) Net cash flow from/(used in) financing activities (C) (55.76) (320.95) (969.97) (406.36) Net increase/(decrease) in cash & cash equivalents (436.04) (A+B+C) Cash & cash equivalents as at beginning of the year Cash & cash equivalents as at end of the year SIGNIFICANT ACCOUNTING POLICIES ANNEXURE IV Nature of Operations The Company was Incorporated on 06/03/2009. The Company is mainly engaged in business of Shrimp Farming and Trading of Prawns, Prawns Feed Seeds and Medicines. Significant accounting policies Basis of accounting and preparation of financial statements These financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under section 211(3C) & the other relevant provisions of the Companies Act, 1956 and Companies Act 2013 and other pronouncements of the Institute of Chartered Accountants of India. Page 182 of 370

184 All the assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be less than 12 months. Use of estimates The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. Cash and cash equivalents (for purposes of Cash Flow Statement) Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Cash flow statement Cash flows are reported using the indirect method, whereby loss before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. Depreciation and amortisation Depreciation on Fixed Assets is Provided in manner Prescribed in Schedule II of Companies Act, Intangible assets are amortised over the estimated useful lives of the assets or period of 3 years, whichever is shorter. Revenue recognition (a) 'Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. (b) Gross Sales (net of Return) include VAT/CST, wherever applicable. (c) Other Income is recognized on accrual basis. (d) Dividend Income is recognized when right to receive dividend is established. (e) Interest Income is recognized when no significant uncertainty as to its realization exists and is accounted for on time proportion basis at contracted rates. (f) Scrap, Salvage/Waste materials and sweepings are accounted for on realization. Page 183 of 370

185 (g) Insurance and other miscellaneous claims are recognized on receipt/acceptance of claim. Contractual pass through incentives, benefits, etc. are recognized on receipt basis. Tangible fixed assets, Intangible assets and work-in-progress Fixed assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises of the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recoded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Investments Long-term investments are carried individually at acquisition cost less provision for diminution, other than temporary, in the value of long term investments. Borrowing costs Borrowing costs relating to the acquisition / construction of qualifying assets are capitalised until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. Inventories Finished goods are valued at the lower of cost and net realisable value. Earnings per share Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Preliminary Expenses The balance of Preliminary expenses is carried as a Non-Current asset and is amortised over a period of 5 years from the date of the issue of shares. Page 184 of 370

186 Details of Share Capital Annexure V (Rs. in Lakhs) Particulars As at March 31, As at December 31, 2014 Share capital Authorised share capital Equity shares of Rs. 10/- each Issued, subscribed & fully paid up share capital Equity shares of Rs. 10/- each TOTAL RECONCILIATION OF NUMBER OF SHARES OUTSTANDING AT THE END OF YEAR (Rs. in Lakhs) As at March 31, As at Particulars December , 2014 Equity shares at the beginning of the year Add: Other allotments TOTAL DETAILS OF SHAREHOLDERS HOLDING MORE THAN 5% OF THE AGGREGATE SHARES IN THE COMPANY As at 31st March, 2010 As at 31st March, 2011 As at 31st March, 2012 Name of No. of No. of No. of Shareholder Shares Percentage Shares Percentage Shares Percentage Pradeep Navik Shantilal Patel Rashmiben Patel Susanben Navik As at 31st March, As at 31st March, As at 31 st Name of Shareholder December, 2014 No. Of Percent No. Of Percent No. Of Percent Shares age Shares age Shares age Pradeep Navik Shantilal Patel Rashmiben Patel Page 185 of 370

187 Susanben Navik Agave Tradecom LLP (formerly Agave Tradecom Private Limited) RESERVES & SURPLUS Annexure VI (Rs. in Lakhs) As at March 31, As at Particulars December , 2014 Surplus in statement of Profit & Loss Opening balance Add: Profit for the year/ period Add: Addional IT Less: Shortage of IT Provision of Last Year Less: Adjustment due to change In Depreciation Method Closing balance Securities Premium A/c Opening balance Add: Additions during the year/ period Closing balance TOTAL DETAILS OF LONG TERM BORROWINGS AS RESTATED ANNEXURE VII (Rs. in Lakhs) As at March 31, As at Particulars December , 2014 Secured Unsecured TOTAL Page 186 of 370

188 Details of terms of Repayment for the Term Loans and Security provided in respect of Secured Term Loans: Particulars Term Loan from Banks From Banks(Secured - Plant & Machinery) Punjab National Bank (Sanctioned limit Rs Lakhs and Rate Of Interest 15% p.a.) Terms of repayment As at March 31, (Rs. in Lakhs) As at Decemb er 31, [To be repaid in 54 monthly instalments of Rs.5.50L,Repayment starting from 31/01/2012] Nature of Security: Hypothecated against Plant & Machinery Total [A] From Banks (Secured - Vehicles) Nature of Security: [Hypothecated against Vehicle - Car] 1)Allahabad Bank-Car Loan (ROI - 14% p.a) )HDFC Bank-Car Loan )Bank of India -Tata Xenon Loan )Bank of India -Audi A4 Loan )Bank of India -Fortuner Loan )Allahabad Bank-Duster [3] Loan )Induslnd Bank-Tractor Loan )Kotak Bank-New Innova Car )Bank of India-Swift )Kotak Bank-Car Loan Total [B] Grand Total [A+B] Page 187 of 370

189 Details of Unsecured Loans and Advances from Relative parties & others (Rs. in Lakhs) As at March 31, As at Particulars Decembe r 31, 2014 Loans and Advances From Related Parties Loans and Advances From Others (Unsecured) Loans & Advances from Financial Institutions Other Loans and Advances, Unsecured TOTAL DETAILS OF LONG TERM PROVISIONS AS RESTATED Particulars As at March 31, ANNEXURE VIII (Rs. in Lakhs) As at December 31, 2014 Provision for employee benefits TOTAL DETAILS OF OTHER CURRENT LIABILITIES AS RESTATED Particulars As at March 31, ANNEXURE IX (Rs. in Lakhs) As at December 31, 2014 Other payables Advance from customers Statutory dues Others TOTAL Page 188 of 370

190 DETAILS OF SHORT TERM PROVISIONS AS RESTATED Particulars As at March 31, ANNEXURE- X (Rs. in Lakhs) As at December31, 2014 Provision for income tax (net off advance tax and tax deducted at source) Provision for Employee Benefits Others TOTAL DETAILS OF SHORT TERM BORROWINGS AS RESTATED ANNEXURE-XI (Rs. in Lakhs) As at March 31, As at Particulars December , 2014 Secured Unsecured TOTAL Details of short term borrowings As at March 31, As at Particulars December , 2014 Loans Repayable On Demand [From Banks, Secured] Allahabad Bank Punjab National Bank Bank of India [Hypothecated against stock and Books Debts] TOTAL Page 189 of 370

191 DETAILS OF NON CURRENT INVESTMENTS AS RESTATED ANNEXURE -XII (Rs. in Lakhs) As at March 31, As at Particulars Decembe r 31, 2014 Investment in Govt.and Trust securities Other Investments TOTAL DETAILS OF LONG TERM LOANS & ADVANCES ANNEXURE XIII (Rs. in Lakhs) Particulars As at March 31, As at December 31, 2014 Security deposits Rent deposits Others TOTAL DETAILS OF OTHER NON CURRENT ASSETS AS RESTATED ANNEXURE XIV (Rs. in Lakhs) As at March 31, As at Particulars December , 2014 Unamortised expenditure TOTAL DETAILS OF INVENTORIES AS RESTATED ANNEXURE XV (Rs. in Lakhs) Particulars As at March 31, As at December 31, 2014 Stock-in-trade TOTAL Page 190 of 370

192 DETAILS OF TRADE RECEIVABLES AS RESTATED ANNEXURE-XVI (Rs. in Lakhs) As at March 31, As at Particulars December , 2014 Unsecured, considered good Less than six months More than six months TOTAL DETAILS OF SHORT TERM LOANS & ADVANCES ANNEXURE XVII (Rs. in Lakhs) Particulars As at March 31, As at December 31, 2014 Advance to employees Advance to Supplier Balances with government authorities Others TOTAL DETAILS OF OTHER CURRENT ASSETS AS RESTATED ANNEXURE - XVIII (Rs. in Lakhs) Particulars As at March 31, As at December 31, 2014 Unamortised expenditure Share issue expenses* Others TOTAL *Share issue expenses shall be written off against securities premium account on completion of IPO Page 191 of 370

193 Details of Other Income as restated Particulars As at March 31, Annexure XIX As at December 31, 2014 (Rs. in Lakhs) Nature Other Interest income Income Net profit before tax as restated Percentage Source of income Commission income Interest Income Discount received Miscellaneou s income Total other income Capitalisation Statement as at 31 December, 2014 Annexure XX (Rs. in Lakhs) Particulars Pre Issue Post Issue Borrowings Short term debt (A) * Refer note Below Long term debt (B) * Refer note Below Total debts (C) Shareholders funds Equity share capital Reserve and surplus - as restated Total shareholders funds Long term debt / shareholders funds Total debt / shareholders funds *Since post issue borrowings cannot be determined as on the date of this report, the respective columns of short term & long term borrowings post issue has been intentionally left blank. Page 192 of 370

194 Statement of Tax Shelters Annexure XXI (Rs. in Lakhs) As at March 31, As at Particulars December , 2014 Profit before tax as per books (A) Tax Rate (%) 30.90% 30.90% % % 33.99% 33.99% Tax at notional rate on profits Adjustments : Permanent differences (B) Expenses disallowed under Income Tax Act, Total permanent differences(b) Income considered separately (C) (2.04) (17.18) - Total income considered separately (C) (2.04) - - (2.59) (17.18) - Timing differences (D) Difference between tax depreciation and book (0.69) (6.09) (6.74) (27.56) (39.84) - depreciation Difference due to expenses allowable/ disallowable u/s Total timing differences (D) (0.69) (6.09) (6.74) (27.56) (39.84) - Net adjustments E = (B+C+D) (2.73) (6.06) (6.31) (29.58) (52.23) - Tax expense / (saving) thereon Income from other sources Income from other sources (F) Taxable income/(loss) (A+E+F) Taxable income/(loss) as per MAT Income tax as returned/computed Tax paid as per normal or MAT Normal Normal Normal Normal Normal Page 193 of 370

195 Related Party Transaction with Directors and other related parties Name of Director Nature of Transaction Amount of Transactio n in Amount Outstanding as on (Payable)/ Receivable Amount of Transaction in Amount Outstanding as on (Payable )/ Receivable Amount of Transaction in ANNEXURE XVII (Rs. in Lakhs) Amount Outstanding as on (Payable)/ Receivable Director Remuneration Pradeep Net of Unsecured Ratilal Loans Taken/(Repaid) (11.46) (7.72) (27.29) - Navik Interest on Unsecured Loan Director Remuneration Shantilal Net of Unsecured Ishwarlal Loans Taken/(Repaid) (21.94) (35.98) (37.73) 1.75 Patel Interest on Unsecured Loan Director Remuneration Rohan Unsecured Net of Unsecured Loans (10.53) (14.31) 3.13 (3.13) (10.53) 3.78 (14.31) (11.18) (3.13) Pradeepku Loans Taken/(Repaid) mar Navik Interest on Unsecured Loan Director Remuneration Susanben Net of Unsecured Pradeep Loans Taken/(Repaid) (54.80) (45.89) (8.90) Navik Interest on Unsecured Loan Director Remuneration Rashmiben Net of Unsecured Shantilal Loans Taken/(Repaid) 1.60 (1.60) (23.39) (22.88) (0.51) Patel Interest on Unsecured Loan Dhaval Net of Unsecured (7.00) Page 194 of 370

196 Name of Director S.Patel Kimi S.Patel Preety Dipak Mistry Mary R.Moses Bhanuben R. Navik Leelaben M. Khalasi Madhubhai Khalasi Tapi Aqua Nature of Transaction Amount of Transactio n in Loans Taken/(Repaid) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) Interest on Unsecured Loan Sales Amount Outstanding as on (Payable)/ Receivable Amount of Transaction in Amount Outstanding as on (Payable )/ Receivable Amount of Transaction in Amount Outstanding as on (Payable)/ Receivable (10.00) (3.92) (6.08) - (6.75) (10.00) (23.08) (15.69) (7.39) (10.53) (9.53) (1.00) - (1.12) (2.74) - (3.03) - (3.36) (5.34) - (6.04) (4.76) (1.16) (5.45) - (6.04) (5.00) (1.04) Purchases Page 195 of 370

197 Name of Director Darshan Aqua Farm Deep Aqua Farm Dilip Aqua Farm Dinkar Aqua Farm Divya Aqua Farm Agni Aqua Farm Akash Aqua Farm Jal Aqua Farm Pruthvi Aqua Farm Vayu Aqua Farm S.R.Aqua Farm Kimi Aqua Farm Nature of Transaction Amount of Transactio n in Amount Outstanding as on (Payable)/ Receivable Amount of Transaction in Amount Outstanding as on (Payable )/ Receivable Amount of Transaction in Amount Outstanding as on (Payable)/ Receivable Sales Purchases Advance taken (11.50) Sales Purchases Advance taken (17.92) Sales Purchases Advance taken (18.25) Sales Purchases Advance taken (11.20) Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases Page 196 of 370

198 Name of Director Dhaval Aqua Farm Shanti Aqua Farm Preety Aqua Farm Khodiyar Aqua Farm Sai Leela Aqua Farm Vicky Aqua farm Jacob Foods Pvt.Ltd Nature of Transaction Amount of Transactio n in Amount Outstanding as on (Payable)/ Receivable Amount of Transaction in Amount Outstanding as on (Payable )/ Receivable Amount of Transaction in Amount Outstanding as on (Payable)/ Receivable Sales Purchases Advance Given Advance Recovered Sales Purchases Sales Purchases Sales Purchases Advance taken (13.00) Sales Purchases Sales Purchases Advance taken (5.00) Sales Purchases Advance given Page 197 of 370

199 Related Party Transaction With Directors ANNEXURE XVII (Rs. in Lakhs) Name of Director Nature of Transaction Amount of Transaction in Amount Outstanding as on (Payable)/ Receivable Amount of Transaction in Amount Outstanding as on (Payable)/ Receivable Amount of Transaction till 31/12/2014 Amount Outstanding as on (Payable)/ Receivable Pradeep Ratilal Navik Director Remuneration (0.21) (1.68) (7.28) Net of Unsecured Loans Taken/(Repaid) Interest on Unsecured Loan 0.56 (0.56) 0.40 (0.96) - (0.96) Shantilal Ishwarlal Patel Director Remuneration (1.52) (2.88) (9.93) Net of Unsecured Loans Taken/(Repaid) 2.99 (1.24) 0.11 (1.35) - (1.35) Director Remuneration (1.27) (2.93) (9.93) Rohan Net of Unsecured Loans Pradeepkuma - (3.13) - (3.13) - (3.13) Taken/(Repaid) rnavik Interest on Unsecured Loan Susanben Director Remuneration 6.00 (0.62) 6.00 (1.64) 6.75 (3.08) Pradeep Net of Unsecured Loans Navik (3.37) (5.54) - (5.54) - (5.54) Taken/(Repaid) Director Remuneration 6.00 (0.10) 6.00 (1.03) 6.75 (3.08) Rashmiben Net of Unsecured Loans Shantilal - (0.51) - (0.51) - (0.51) Taken/(Repaid) Patel Interest on Unsecured Loan Dhaval Net of Unsecured Loans - (7.76) - (8.59) - (8.59) Page 198 of 370

200 S.Patel Kimi S.Patel Preety Dipak Mistry Mary R.Moses Bhanuben R.Navik Lilavatiben R.Navik Madhubhai B.Khalasi Tapi Aqua Darshan Aqua Farm Taken/(Repaid) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) - (7.48) - (8.29) - (8.29) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) - (8.19) - (9.08) - (9.08) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) - (1.25) - (1.38) - (1.38) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) - (3.73) (3.73) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) - (1.28) (1.28) Interest on Unsecured Loan Net of Unsecured Loans Taken/(Repaid) - (1.15) (1.15) Interest on Unsecured Loan Sales Purchases Sales Purchases Advance taken/ (repaid) - (11.50) (11.50) Deep Aqua Sales Page 199 of 370

201 Farm Purchases Advance taken/ (repaid) - (17.92) (17.92) Sales Dilip Aqua Purchases Farm Advance taken/ (repaid) - (18.25) (18.25) Sales Dinkar Aqua Purchases Farm Advance taken/ (repaid) - (11.20) (11.20) Divya Aqua Sales Farm Purchases Agni Aqua Sales Farm Purchases Akash Aqua Sales Farm Purchases Jal Aqua Sales Farm Purchases Pruthvi Aqua Sales Farm Purchases Vayu Aqua Sales Farm Purchases S.R.Aqua Sales Farm Purchases Kimi Aqua Sales Farm Purchases Dhaval Aqua Sales Farm Purchases Shanti Aqua Sales Farm Purchases Preety Aqua Sales Page 200 of 370

202 Farm Purchases Sales Khodiyar Purchases Aqua Farm Advance taken/ (repaid) - (13.00) (13.00) Sai Leela Sales Aqua Farm Purchases Vicky Aqua Sales Farm Purchases Sales Jacob Foods Purchases Pvt.Ltd Advance given Advance recovered Page 201 of 370

203 SUMMARY OF ACCOUNTING RATIOS Ratio Restated PAT as per statement of profit and loss Weighted average number of equity shares at the end of the year/ period As at March 31, Annexure XXIII (Rs. in Lakhs) As at December31, Net worth Earnings Per Share Basic & Diluted (Rs)* Return on net worth (%) Net asset value per share (Rs)** Nominal value per equity share (Rs.) Reconciliation of Restated profit: Annexure XXIV (Rs. in Lakhs) As at March 31, As at Adjustments for December , 2014 Net profit/(loss) after tax as per audited statement of profit & loss Adjustments for: Provision for gratuity Changes in depreciation Share issue expenses Changes in current year/period tax Deferred tax liability / asset adjustment Net profit/ (loss) after tax as restated Explanatory notes to the above restatements made in the audited financial statements of the Company for the respective years/ period. Page 202 of 370

204 Adjustments having impact on Profit- (a) Provision for gratuity has been made which was not provided earlier. And adjustment for same is done in restated financial statement. (b) Depreciation on fixed assets is provided in manner prescribed in schedule II of Companies Act 2013 from April 1, 2014 onwards. Material Regrouping Appropriate adjustments have been made in the restated financial statements, wherever required, by reclassification of the corresponding items of income, expenses, assets and liabilities, in order to bring them in line with the groupings as per the audited financials of the Company for all the years and the requirements of the Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations *Important Note The restated financials did not consider the issue of bonus shares made in March Hence, where post bonus calculations are given the restated figures have been adjusted to that effect. Page 203 of 370

205 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following discussion of our financial condition and results of operations should be read in conjunction with our restated financial statements for the nine months ended December 31, 2014 and for the financial years ended March 31, 2014, March 31, 2013, March 31, 2012, March 31, 2011 and March 31, 2010 prepared in accordance with the Companies Act and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexure and notes thereto and the reports thereon, included in the section titled Financial Statements on page 173 of this Draft Prospectus. Indian GAAP differs in certain material respects from U.S. GAAP and IFRS. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Draft Prospectus, nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Prospectus will provide meaningful information is entirely dependent on the reader s level of familiarity with the Companies Act, Indian GAAP and the SEBI ICDR Regulations. This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in Risk Factors and "Forward-Looking Statements" beginning on pages 13 and 12, of this Draft Prospectus respectively. Our Company was incorporated on March 6, 2009 and has completed six years since incorporation. The Management s Discussion and Analysis of Financial Condition and Results of Operations reflects the analysis and discussion of our financial condition and results of operations for the nine months ended December 31, 2014 and for the financial years ended March 31, 2014, March 31, 2013, March 31, 2012, March 31, 2011 and March 31, Overview Incorporated in 2009, our Company is pioneer in aquaculture industry in the state of Gujarat. Our Company is engaged in farming of shrimps viz. white shrimps and tiger shrimps which has an enormous demand worldwide for human consumption. In addition to shrimp farming, our Company also deals in products used for aquaculture of shrimps such as shrimp seeds, feeds, probiotics and others. Driven by rich experience of more than 20 years in aquaculture, innovation and investment in R&D, our Promoters strategized to capitalize on the growing global demand of shrimps and instituted our Company under the name Zeal Aqua Private Limited in March 2009 with a vision to develop an advanced, sustained and fully integrated aquaculture system across India. Subsequently in March 2015, our Company was converted into a public limited company and its name was changed to Zeal Aqua Limited. The revolution of aquaculture industry gained momentum, with the realization of the government to make commercial use of coastal lands which could not be used for agricultural purposes. The introduction of schemes of Government to allot coastal lands for aquaculture purposes to promote this industry and generate a source of revenue for farmers motivated our Promoters to enter this industry. Our Promoters who were individually culturing shrimps joined hands in 2009 to form our Company to make the business scalable and reap the benefits of synergy. At present, our Company has 81 ponds spread over around 102 hectares of land, wherein the land is being used by our Company in accordance with collaboration agreements entered with various parties. The said collaboration agreements ensure continuity of land availability on which our Company constructs ponds. Page 204 of 370

206 In addition to shrimp farming on own ponds, our Company is also engaged in satellite farming whereby our Company supplies inputs on credit to small farmers and buys shrimps from these farmers. We deploy our specific quality control measures and the farmers under satellite farming are required to adhere to our farming standards. The satellite farming enables companies to scale up and multiply its production without putting up physical infrastructure on its own. This flexible model of shrimp production helps our Company to efficiently manage growing demand of shrimps. Our growing operations are witnessed by our sales turnover which has scaled multifold over the years. Our Company now intends to make a forward integration and is in the process of setting up a cold storage unit with processing facilities. This shall open our avenues to international markets. This is one of our major step in developing an integrated aquaculture system. Our Company not only believes in growing in numbers, but it believes in growing technologically and in an eco-friendly manner. With the objective of enhancing productivity, quality and minimize environmental degradation our Company has taken various measures such as introduction of PE Line Ponds, use of qualitative feeds, bio-security measures such as fencing and water management among others. Our state of art infrastructure and farming practices have been recognized and has fetched us the following recognitions: CIFE award in year Bhumi Nirman Award in 2011 Fisheries excellence award by Doordarshan Best Farmers for L.Vannemai by MPEDA in 2013 We believe in qualitative production with an eco-friendly approach and have thereby developed a long-continuing relationship with our customers. With the experience of our Promoters, technological drive, continuous research, supplier tie-ups, customer relationships, government support and industry demand for shrimps and a forward integration in pipeline, our Company aims to become largest shrimp house in India and capture global markets as well. Page 205 of 370

207 SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL PERIOD In the opinion of the Board of Directors of our Company, there have not arisen, since the date of the last financial statements disclosed in this Draft Prospectus, any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months except as follows:- 1. We have passed the resolution for conversion of our Company from private to public company dated March 25, 2015 and Registrar of Company issued the Fresh Certificate of Incorporation dated March 31, M/s Pary & Co, Chartered Accountants statutory auditors of Company have been appointed as statutory auditors from September 30, The authorized share capital as on December 31, 2014 was Rs. 2,00,00,000 (Rupees Two Crores Only) consisting of 20,00,000 Equity Shares of Rs. 10 each which was increased to Rs. 5,00,00,000 (Rupees Five Crores Only) consisting of 50,00,000 Equity Shares of face value Rs. 10 each pursuant to a resolution of the shareholders dated March 25, 2015 respectively. 4. We have passed a special resolution on September 30, 2014 authorizing the Board of Directors to borrow funds for the purpose of business of the Company upto an amount of Rs. 100 Crores and for the purpose also authorized them to provide requisite security. 5. We have passed a special resolution on March 25, 2015 to authorize the Board of Directors to raise funds by making an initial public offering upto Rs Crores. 6. We have appointed Mr. Shantilal Patel as the Managing Director and Mr. Pradeep Navik and Mr. Rohan Navik as Whole-time Directors of the Company with effect from March 25, 2015 till March 24, 2020 respectively. 7. We have issued Bonus Shares in the ratio of 3 shares for every 5 shares held to the following existing shareholders of the Company on March 25, 2015: Sr. No. Name of Person No of Shares Allotted 1 Pradeep Navik 1,55,820 2 Shantilal Patel 1,67,940 3 Susanben Navik 1,55,880 4 Rashmiben Patel 1,55,880 5 Rohan Navik 18,060 6 Navik Aqua Private Limited 30,000 7 Rati Aqua Private Limited 48,360 8 Goldpink Aquaculture Private Limited 30,000 9 Susan Aqua Private Limited 30, Agave Tradecom LLP 2,50, Bomi Olpadwala Dhaval Patel 6, Mary Moses 18, Kimi Navik 12, Ramesh Khalasi 6, Ramnik Khalasi 6, Ranjanben M. Khalasi 6, Pravin Khalasi 6, Jayantibhai Khalasi 6, Ushaben Khalasi 6, Amtha Lala Khalasi 6, Champak Khalasi 6,000 Page 206 of 370

208 Sr. No. Name of Person No of Shares Allotted 23 Dinesh Deva Khalasi 6, Meenaben Khalasi 6, Uttam I. Khalasi 6, Uttam R. Khalasi 6,000 Total 11,50, We have appointed Naginbhai Patel, Mr. Roshan Kadodwala and Mr. Maheshbhai Mistry as Independent Director on the Board of the Company with effect from March 25, We have appointed Mr. Shailendrasingh Patil as Chief Financial Officer of the Company effect from March 25, We have appointed Mr. Pratim Ramani as Company Secretary and Compliance Officer of Our Company on March 25, We have received an Income Tax order dated March 27, 2015 on April 1, 2015, whereby we have been levied a demand of Rs.1,76,78,940 as the tax payable by us. We contemplate to challenge this demand by filing an Appeal against the Assessment Order. Amount relating to penalty proceeding under section 271(1)(c) read with section 274 of the Income Tax Act is however unascertainable. SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS Our business is subjected to various risks and uncertainties, including those discussed in the section titled Risk Factor beginning on page 13 of this Draft Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following: Competition from other players. Allotment and renewal of Land from Government Outbreak of diseases affecting shrimps International economy scenario and demand Environmental Conditions Significant Accounting Policies Basis of accounting and preparation of financial statements These financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under section 211(3C) & the other relevant provisions of the Companies Act, 1956 and Companies Act 2013 and other pronouncements of the Institute of Chartered Accountants of India. All the assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be less than 12 months. Page 207 of 370

209 Use of estimates The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. Cash and cash equivalents (for purposes of Cash Flow Statement) Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Cash flow statement Cash flows are reported using the indirect method, whereby loss before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. Depreciation and amortisation Depreciation on Fixed Assets is Provided in manner Prescribed in Schedule II of Companies Act, Intangible assets are amortised over the estimated useful lives of the assets or period of 3 years, whichever is shorter. Revenue recognition (a) 'Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. (b) Gross Sales (net of Return) include VAT/CST, wherever applicable. (c) Other Income is recognized on accrual basis. (d) Dividend Income is recognized when right to receive dividend is established. (e) Interest Income is recognized when no significant uncertainty as to its realization exists and is accounted for on time proportion basis at contracted rates. (f) Scrap, Salvage/Waste materials and sweepings are accounted for on realization. (g) Insurance and other miscellaneous claims are recognized on receipt/acceptance of claim. Contractual pass through incentives, benefits, etc. are recognized on receipt basis. Page 208 of 370

210 Tangible fixed assets, Intangible assets and work-in-progress Fixed assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises of the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recoded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Investments Long-term investments are carried individually at acquisition cost less provision for diminution, other than temporary, in the value of long term investments. Borrowing costs Borrowing costs relating to the acquisition / construction of qualifying assets are capitalised until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. Inventories Finished goods are valued at the lower of cost and net realisable value. Earnings per share Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Taxes on income 'Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company. Page 209 of 370

211 Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability. Current and deferred tax relating to items directly recognised in equity is recognised in equity and not in the Statement of Profit and Loss. Provisions and contingencies A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Employee benefits Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered. Post-employment and other long term employee benefits are recognized as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Profit and Loss account. Foreign currency transactions Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of the transactions. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rates on that date. Exchange differences arising on foreign exchange transactions during the year and on restatement of monetary assets and liability are recognized in the profit and loss account of the year. Impairment of Assets An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable account in subsequent period. Page 210 of 370

212 Identification of segments The Company is engaged in Providing & Selling its products in single economic environment in India i.e. There is a single geographical segment. Also company has single business statement and is the only reportable segment. Preliminary Expenses The balance of Preliminary expenses is carried as a Non-Current asset and is amortised over a period of 5 years from the date of the issue of shares. DISCUSSION ON RESULT OF OPERATION The following discussion on results of operations should be read in conjunction with the audited financial results of our Company for the nine months ended December 31, 2014 and for the financial years ended March 31, 2014, March 31, 2013, March 31, 2012, March 31, 2011 and March 31, OVERVIEW OF REVENUE & EXPENDITURE Revenues Our total revenue comprises of our revenue from operations and other income. The following table shows our revenue from operations and other income: Particulars (Rs. In Lakhs) As at March 31 As at December 31, Income Revenue from Operation 6, , , , As a % of Total Revenue 99.99% 99.48% 99.87% 99.83% Other Income As a % of Total Revenue 0.01% 0.52% 0.13% 0.17% Total Revenue 6, , , , Revenue from operations: Our principal component of income is from sale of high quality shrimps produced by us. Our Revenue from operations accounted for 99.83%, 99.87%, 99.48% and 99.99% of our total revenue for 9 months ended December 31, 2014, fiscal 2014, fiscal, 2013 and fiscal 2012, respectively. Our Company usually follows negotiated price mechanism. We quote on the basis of requirements received from our customers. Page 211 of 370

213 Other Income: Our other Income generally comprises of interest income, discounts etc Our other income accounted for 0.17%, 0.13%, 0.52% and 0.01% of our total revenue for 9 months ended December 31, 2014, fiscal 2014, fiscal, 2013 and fiscal 2012, respectively. Expenditure Our Company s expenditure comprises of Costs of raw material consumed, Changes in inventories, Employee benefit expenses, Finance cost, Depreciation and amortization expenses and other expenses. The following table sets forth, for the fiscal years indicated, certain items derived from our Company s audited restated financial statements, in each case stated in absolute terms and as a percentage of total sales and/or total revenue. Page 212 of 370 (Rs. In Lakhs) Particulars As at March 31 As at December 31, INCOME Revenue from Operations As a % of Total Revenue 99.99% 99.48% 99.87% 99.83% Other Income As a % of Total Revenue 0.01% 0.52% 0.13% 0.17% Total Revenue (A) EXPENDITURE Purchase of stock-in-trade As a % of Total Revenue 80.24% 81.75% 86.47% 86.86% Changes in inventories of finished goods, traded goods and work-inprogress As a % of Total Revenue 0.12% -0.09% -0.14% 0.28% Employee benefit expenses As a % of Total Revenue 0.46% 0.50% 0.40% 0.18% Finance costs As a % of Total Revenue 4.34% 5.02% 2.56% 2.27% Depreciation and amortisation expense As a % of Total Revenue 1.13% 0.99% 0.63% 0.54% Other Expenses As a % of Total Revenue 10.90% 8.82% 6.26% 6.15% Total Expenses (B) 6, , , , As a % of Total Revenue 97.18% 96.97% 96.18% 96.30% Profit before tax (A-B) As a % of Total Revenue 2.82% 3.03% 3.82% 3.70% Exceptional items Profit before extraordinary items and tax As a % of Total Revenue 2.82% 3.03% 3.82% 3.70% Extraordinary items

214 Particulars As at March 31 As at December 31, Profit before tax PBT Margin 2.82% 3.03% 3.82% 3.70% Tax expense : (i) Current tax (ii) Deferred tax(asset)/liability (iii) Fringe Benefit Tax (iii) (Short)/Excess provision for earlier years Total Tax Expense Profit for the year/period PAT Margin 1.89% 1.95% 2.57% 2.77% Purchase of stock in trade Cost of raw material consumed comprises of the expenses for purchase of seeds, feeds, bleaching, pro-biotics and satellite products. Cost of purchase of stock in trade accounted for 86.86%, 86.47%, 81.75% and 80.24% of our total revenue for the 9 months ended December 31, 2014 and fiscal 2014, 2013 and 2012 respectively. Changes in inventories of finished goods and work in progress Changes in inventories of finished goods and work in progress accounted for 0.28%, -0.14%, -0.09% and 0.12% of our total revenue for 9 months ended December 31, 2014, fiscal 2014, fiscal, 2013 and fiscal 2012, respectively. Employee Benefits Expenses Our employee benefits cost primarily consists of salaries, wages and bonuses paid to our employees, staff welfare expenses, provided fund contributions and gratuity provisions. Employee benefits accounted for 0.18%, 0.40%, 0.50% and 0.46% of our total revenue for 9 months ended December 31, 2014, fiscal 2014, fiscal, 2013 and fiscal 2012, respectively. Financial Cost Our financial cost includes interest on borrowing from banks, other lenders, bank charges, processing charges, interest on delayed payment of taxes etc. Our finance costs accounted for 2.27%, 2.56%, 5.02% and 4.34% of our total revenue for 9 months ended December 31, 2014, fiscal 2014, fiscal, 2013 and fiscal 2012, respectively. Depreciation Depreciation includes depreciation and amortisation on plant & machinery, building, office equipments and other tangible and intangible assets. Depreciation and amortization accounted for 0.54%, 0.63%, 0.99% and 1.13% of our total revenue for 9 months ended December 31, 2014, fiscal 2014, fiscal, 2013 and fiscal 2012, respectively. Other Expenses Other expenses include fuel expenses, electricity expenses, labour expenses, transportation charges, pond repairing expenses, director s remuneration, repairs and maintenance, legal & professional charges etc. Other expense accounted for 6.15%, 6.26%, 8.82% and 10.90% of our total revenue for 9 months ended December 31, 2014, fiscal 2014, fiscal, 2013 and fiscal 2012, respectively. Page 213 of 370

215 REVIEW OF PERIOD FOR NINE MONTH ENDED DECEMBER 31, 2014 INCOME Income from Operations Our income from operations was Rs. 16, lakhs which was 99.83% of our total revenue for the period ended December 31, Other Income Our other income was Rs lakhs which was 0.17% of our total revenue for the period ended December 31, EXPENDITURE Purchase of stock-in-trade Our purchase of stock-in-trade was Rs. 13, lakhs which was % of our total revenue for the period ended December 31, Changes in inventories of finished goods, traded and work in progress goods Changes in inventories of finished goods, traded and work in progress goods were Rs lakhs which was 0.28% of our total revenue for the period ended December 31, Employee Benefits Expenses Our employee benefits expenses were Rs lakhs which was 0.18% of our total revenue for the period ended December 31, Financial Cost Our financial cost was Rs lakhs which was 2.27% of our total revenue for the period ended December 31, Depreciation and amortisation expense Our depreciation and amortization expenses were Rs lakhs which was 0.54% of our total revenue for the period ended December 31, Other Expenses Our other expenses were Rs lakhs which was 6.15% of our total revenue for the period ended December 31, 2014 PROFIT BEFORE TAX Our profit before tax was Rs lakhs which was 3.70% of our total revenue for the period ended December 31, NET PROFIT AFTER TAX Our restated net profit after tax was Rs lakhs for the period ended December 31, Page 214 of 370

216 COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2014 WITH FINANCIAL YEAR ENDED MARCH 31, 2013 INCOME Operating Income Variance Particulars (Rs. Lakhs) (Rs. Lakhs) (%) Operating Income 7, , % The operating income of the Company for the year ending March 31, 2014 is Rs. 13, lakhs as compared to Rs. 7, lakhs for the year ending March 31, 2013, showing an increase of 89.20%. The increase in sales is due to increase in satellite farming operations. Other Income Our other income decreased by 54.69% from Rs Lakhs to Rs Lakhs. DIRECT EXPENDITURE Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Purchase of stock-intrade 5, , % Changes in inventories of finished goods, traded goods and workin-progress % Total 5, , % The direct expenditure has increased from Rs. 5, lakhs in Financial Year to Rs. 11, lakhs in Financial Year showing an increase of 99.23% over the previous year. The increase is in line with our increase in sales which has almost doubled compared to previous year. ADMINISTRATIVE AND EMPLOYEE COSTS Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Employee Benefit Expenses % Other Expenses % Total % Our employee benefit expenses increased by Rs lakhs or 52.23% from Rs lakhs during fiscal 2013 to Rs lakhs in fiscal This increase in our employee benefit expenses was due to insurance policies taken for employees and premium paid thereon. Our other expenses increased by Rs lakhs or 33.88% from Rs lakhs during fiscal 2013 to Rs lakhs during fiscal This increase was primarily due to increase in electricity expenses, pond repairing expenses, site labour and wages expenses and repairs and maintenance expenses. These increases in expenses is in line with increase in business activity. FINANCE CHARGES Our finance charges decreased to Rs lakhs in Fiscal 2014 from Rs lakhs during fiscal This decrease is due to decrease in short term borrowings from various banks. Page 215 of 370

217 DEPRECIATION AND AMORTIZATION Our depreciation and amortization expenses increased to Rs lakhs in fiscal 2014 from Rs lakh in fiscal 2013 due to addition in plant & machinery PROFIT BEFORE TAX Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Profit Before Tax % Profit before tax has increased by % from Rs lakhs to Rs lakhs. As percentage of total revenue, profit before tax has increased from 3.03 % in fiscal 2013 to 3.82 % in fiscal 2014 showing an increase of 0.79%.The increase in profit is due to increase in business operations. PROVISION FOR TAX AND NET PROFIT Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Taxation Expenses % Profit after Tax % The profit after tax has increased to Rs lakhs showing an increase of % COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2013 WITH FINANCIAL YEAR ENDED MARCH 31, INCOME Operating Income Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Operating Income 6, , % The operating income of the Company increased by Rs lakhs to Rs. 7, lakhs in fiscal 2013 as compared to Rs. 6, lakhs in fiscal 2012, showing an increase of 10.82%. Other Income Our other income increased by % from Rs lakhs in fiscal 2012 to Rs lakhs in fiscal 2013.The increase is due to rise in discount and interest income. DIRECT EXPENDITURE Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Purchase of stock-intrade 5, , % Changes in inventories of finished goods, traded goods and workin-progress % Total 5, , % Page 216 of 370

218 Our direct expenditure increased by Rs lakhs or 13.19% to Rs. 5, lakhs in fiscal 2013 from Rs. 5, lakhs in fiscal This increase was in conformity with our increased operations. ADMINISTRATIVE AND EMPLOYEE COSTS Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Employee Benefit Expenses 20.28% Other expenses % Total % Our employee benefit expenses increased by Rs lakhs or 20.28% from Rs lakhs during fiscal 2012 to Rs lakhs in fiscal This increase in our employee benefit expenses was driven by a general increase in salaries, allowances and bonus paid to our employees as well as an increase in the number of our employees. Our other expenses decreased by Rs or 9.87 % from Rs lakhs during fiscal 2012 to Rs lakhs during fiscal This decrease was primarily due to decrease in fuel expenses which was off-setted by increase in electricity expenses due to installation of electric facility and decrease in site labour charges as major construction of ponds to place in fiscal FINANCE CHARGES Our finance charges increased by Rs lakhs to Rs lakhs in fiscal 2013 from Rs lakhs in fiscal O2012. DEPRECIATION Our depreciation and amortization expenses decreased by Rs lakhs to Rs lakhs in fiscal 2013 to Rs lakhs in fiscal PROFIT BEFORE TAX Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Profit Before Tax % Our profit before tax increased 19.76% to Rs lakhs in fiscal 2013 from Rs lakhs in fiscal PROVISION FOR TAX AND NET PROFIT Particulars (Rs. Lakhs) (Rs. Lakhs) Variance (%) Taxation Expenses % Profit after Tax % Our profit after tax increased Rs lakhs to Rs lakhs in fiscal 2013 from Rs lakhs in fiscal Page 217 of 370

219 OTHER MATTERS 1. Unusual or infrequent events or transactions Except as described in this Draft Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent. 2. Significant economic changes that materially affected or are likely to affect income from continuing operations Other than as described in the section titled Risk Factors beginning on page 13 of this Draft Prospectus to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations. 3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations Other than as disclosed in the section titled Risk Factors beginning on page 13 of this Draft Prospectus to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations. 4. Future relationship between Costs and Income Our Company s future costs and revenues will be determined by demand/supply situation, government policies and prices of raw materials. 5. The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased prices Increase in revenue is by and large linked to increases in volume of business activity by the Company. 6. Total turnover of each major industry segment in which the issuer company operates. The Company is operating in Aquaculture industry. Relevant industry data, as available, has been included in the chapter titled Our Industry beginning on page 93 of this Draft Prospectus. 7. Status of any publicly announced new products or business segments Our Company has not announced any new product and segment, other than disclosed in the Draft Prospectus. 8. The extent to which the business is seasonal Our business is subject to seasonality with a significant portion of revenue generated primarily during the third quarter of each fiscal year. This seasonality is due to the harvesting of shrimps during that period. Our Company begins partial harvesting from 100 to 120 days of culture and final harvesting begins after 180 days from culture. During the slack period, our Company undertakes cleaning, maintenance and revamping of its ponds and is thus able to produce better quality of prawns by exposing the prawns to a better environment and preventing them from associated diseases. 9. Any significant dependence on a single or few suppliers or customers The % of Contribution of our Company s customer and supplier vis a vis the total income and finished goods / traded goods cost respectively for the period ended December 30, 2014 is as follows: Customers Suppliers Top 5 (%) Top 10 (%) Page 218 of 370

220 10. Competitive Conditions We face competition from existing and potential unorganized competitors which is common for any business. We have, over a period of time, developed certain competitive strengths which have been discussed in section titled Our Business on page 110 of this Draft Prospectus. Page 219 of 370

221 FINANCIAL INDEBTNESS Our Company utilizes various credit facilities from banks, financial institutions and unsecured loan from directors for conducting its business. Set forth below is a brief summary of our Company s significant outstanding secured borrowings and unsecured borrowings together with a brief description of certain significant terms of such financing arrangements: A. Secured borrowings of our Company B. Common Restrictive Covenants C. Unsecured borrowings of our Company Brief details of these facilities are as under: A. Secured Borrowings 1. Loan of Rs. 45 Crore vide Hypothecation Deed dated July 22, 2013 and Supplemental Deed of mortgage dated July 23, 2013 between the Company and the banks [Allahabad Bank ( AB ), Punjab National Bank ( PNB ) and Bank of India ( BOI )] Sanctioned by Allahabad Bank vide sanction letter number Nanpura/Advances/ZAPL/ /059 dated May 23, 2013 and Letter of modification No Nanpura/Adv/ZAPL/099 dated June 29, 2013 Sanctioned by Punjab National Bank vide sanction letter number PNB/Co/Surat/Zeal Aqua/sanction/2013 dated May 08, 2013 Sanctioned by Bank of India vide sanction letter number SMCB/PM/ /008 dated April 13, 2013 and further reviewed on SMCB/SD/ /035 dated September 10, 2014 Page 220 of 370

222 Name of the lender Guarantor Facility Interest Rate (% p.a., unless otherwise specified) Tenor/ Repayment schedule Security Allahabad Bank, Punjab National Bank and Bank of India Mr. Pradeep R Navik Mr. Shantilal I Patel Mrs. Rashmiben S Patel Mrs. Susanben Navik Mr. Rohan Navik Cash Credit Rs. 45 Crore (Rs. In Crores) Nature of facility BOI PNB AB Total Cash credit stocks(cc limit of PNB against Book-debts not to exceed Rs.10 Cr) Cash credit book debts Maximum ceiling limit Bank Margin Rate of interest/commission BOI 25% 4.00% over Base Rate presently 14.25% p.a with monthly rests. PNB 25% 4.50% over Base Rate presently 14.75% p.a with monthly rests. AB 25% 3.25% over Base Rate presently 13.50% p.a with monthly rests. Renewable every year and repayable on demand Primary First Pari Passu charge in favour of Consortium The whole of the movable property and assets of the company including the whole of the current assets of the borrower, raw materials, semi finished and finished goods, stock in progress, stores and spare not relating to plant and machinery (consumable stores and spares) and all other movables, both present and future, whether now lying loose or in cases or which are now lying or stored in or about or shall hereinafter from time to time during the continuance of the security of these presents be brought into or about of the Borrower s premises and godowns situated at plot no 4 & 5, Olpad Industrial Area of GIDC, Mouje Asnabad, Taluka Olpad, District Surat in the state of Gujarat or wherever else the same may be or be held by any party to the order or disposition of the Borrower or in the course of transit or on high seas or on order or delivery, howsoever and whatsoever in the possession of the Borrower and either by way of substitution or addition and All the present and future book debts, outstanding, money receivables including receivables by way of cash, including under the cash incentive scheme or any other scheme claims including claims by way of refund of customs/excise duties under the Duty Drawback Credit Scheme or any other Scheme, claims, bills which are now due and owing or which may any time hereafter during the continuance of this security become due and Page 221 of 370

223 owing to the Borrower in the course of his business by any person, firm, company or body corporate or by the Central Government or by any State Government or office or any municipal or local or public or semi governmental body or authority or any body corporate or undertaking or project whatsoever. Second Pari Passu charge in favour of Consortium All and Singular the Borrower s all movable, plant and machineries, spares and stores relating to plant and machineries, tools and accessories, equipment, electrical. Installations, both present and future whether installed or not and whether now lying loose or in cases or which are now lying or stores in or about or shall hereinafter from time to time during the continuance of security of these persons be brought into or upon or stores or be in or about the Company s premises and godowns situate, lying and being at and pertaining to the Company s undertaking situate at Borrower s premises, godowns at Plot No 4 & 5, Olpad Industrial Area of GIDC, Mouje Asnabad, Taluka Olpad, District Surat in the state of Gujarat or wherever else the same may be or be held by any party to the order or disposition of the Company or in the course of transit or delivery howsoever and whatsoever and either by way of substitution or addition subject to first charge of PNB for the term loan granted to the Borrower. Collateral: Property 1 All right title and interest in superstructure being stair cabin, duck of Lift, passage and stair case admeasuring about sq ft (carpet area) on the back side of Basement in the building "ROYAL ACCORD" together with proportionate undivided share in the land bearing land revenue survey no. 463/1 paiki final plot no. 37 paiki Town Planning scheme no. 11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 2 All right title and interest in superstructure being stair cabin, Duck of Lift, passage and stair case admeasuring about sq, fts.(carpet area) on the back side of Ground floor in the building ROYAL ACCORD" together with proportionate undivided share in the land bearing land Revenue Survey no. 463/1 paiki final plot no. 37 paiki, Town Planning scheme no. 11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 3 All right title and interest in superstructure being stair cabin, Duck of Lift, passage and stair case admeasuring about sq, fts.(carpet area) on back side of First floor in the building "ROYAL ACCORD" together with proportionate undivided share in the land bearing land revenue survey no. 463/1 paiki, final plot no. 37 paiki of Town Planning scheme no. 11 Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik. Property 4 All right title and interest in the superstructure being. Second Floor admeasuring about 3767 sq. fts. (carpet Page 222 of 370

224 area ) in the building "ROYAL ACCORD" together with proportionate undivided in share admeasuring about 180 sq mts in the land bearing land revenue survey no. 463/1 paiki final plot no. 37 paiki of Town Planning scheme no.11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 5 All right title and interest in the superstructure being Third floor admeasuring about 3617 sq. fts. (carpet area) in building "ROYAL ACCORD" together with proportionate undivided share admeasuring about 180 sq. mtrs.in the land bearing land revenue survey no. 463/1 paiki final plot no. 37 paiki of Town Planning scheme no. 11. Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 6 All right title and interest in the superstructure fourth floor portion admeasuring about 1250 sq. fts. (carpet area) together with adjoining terrace admeasuring about 2840 sq. fts. (carpet area) in building "ROYAL ACCORD" together with proportionate undivided share admeasuring about 120 sq. mtrs.in the land bearing land bearing revenue survey no. 463/1 paiki final plot no. 37 paiki of Town Planning scheme no. 11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 7 All rights, title and interest in the flat No. G-l Ground Floor in the building "Versova Sea-side Premises Cooperative Housing Society. Ltd." constructed on the plot No. 17, CTS No. 1055, Jayprakash Road, Andheri (W), Mumbai , belonging to Mr. Pradeep R Navik. Property 8 All that piece and parcels of the land of bungalow no. 15 admeasuring about sq. mtrs. together with constructions thereupon on the ground floor and first floor admeasuring about sq mtrs in Shree Sugam Cooperative Housing Society Ltd, together with easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land Revenue survey no. 462/1, 461/3 and 461/4 paiki, Mouje Adajan, Taluka City, District Surat, belonging to Mrs Susanben Navik Property 9 All that the pieces and parcels of Flat no. 601on the 6 th floor admeasuring about 1150 sq.fts.(super build up area) in the building Jamna Apartment of Jamna Apartment Cooperative Housing Society ltd, together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land revenue Survey no.464/a paiki, Final Plot no. 1 and 3 paiki of Town Planning scheme no. 12, Mouje Adajan, Taluka City, District Surat, belonging to Mrs Susanben Navik Property 10 All that the pieces and parcels of Flat no. 606 on the 6 th floor admeasuring about 700 sq. fts.( super built up area i.e. 588 sq. fts) in the building Ganga Jamna Apartment of Jamna Apartment Cooperative Housing Society Ltd, together with all easements, privileges, rights and benefits attached thereto, situated being and lying on the land Revenue Survey no. 464/A paiki, Final Plot no. 1 and 3 paiki of Town Planning scheme Page 223 of 370

225 no. 12, Mouje Adajan, Taluka City, District Surat, belonging to Mrs Susanben Navik Property 11 All that the piece and parcels of land and building bearing bungalow no. 11 admeasuring about sq. mtrs, of "SHREE SUGAM SOCIETY" situated on the land bearing Revenue survey no. 462/1, 461/3 and 461/4 paiki Mouje Adajan, Taluka City, District Surat, belonging to Mr Pradeep R Navik and Mrs Susanben Navik Property 12 All that piece and parcels of the land and building bearing Awas No. 46 and 47 admeasuring about sq. mtrs, together with constructions thereon, both present and future, together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land Revenue survey no. 5/A, Block No. 4 paiki Mouje Jahangirpura, Taluka City District Surat, belonging to Mr Shantilal Ishwarbhai Patel Property 13 All that piece and parcels of the land and building bearing Awas No. 62 admeasuring about 80 sq. mtrs together with constructions thereon together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land Revenue Survey No. 14/A+, Mouje Pisad, Taluka Choryasi, District Surat, belonging to Mr Shantilal Ishwarbhai Patel Property 14 All that pieces and parcels of the land and building bearing Awas No 38 admeasuring about sq mtrs together with constructions thereon together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land revenue survey no 5/A, Block No 4, paiki, Mouje Jahangirpura, Taluka City, District Surat, belonging to Mrs Rashmiben Shantilal Patel Property 15 All that piece and parcels of the leasehold land Plot No. 4 & 5 admeasuring about 793 Sq. mts.together with constructions thereon and together with plant and machinery embedded to earth or permanently fastened to anything attached to earth and together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto situated, being and lying at pad Industrial Area of Gujarat Industrial Development Corporation situated on the land bearing Revenue Survey No, 6/P, Mouje Asnabad, Taluka Olpad, District: Surat., belonging to M/s Zeal Aqua Pvt Ltd Property 16 Belonging to Mr Shantilal Ishwarbhai Patel and Mrs Rashmiben Shantilal Patel] All that the pieces and parcels of the non agricultural land admeasuring 546 sq mts adjoining the land of Awas No 62, together with constructions thereon, situated, being and lying on the non agriculture land revenue survey no 14/A+B, situate, being and lying at Mouje pisad Taluka Choryasi, District Surat together Page 224 of 370

226 Amount outstanding as on December 31, 2014 with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto and bounded as under: East: Surat Olpad road West: Awas No 61 Property 17 Registered Mortgage of Agriculture land at block no. 470, village: Kudiyana, Tal: Olpad, Dist: Surat, admeasuring sq. mts belonging to Mr. Pradeep Navik Property 18 Registered Mortgage of Agriculture land at block no. 477, village: Kudiyana, Tal: Olpad, Dist: Surat, admeasuring 4654 sq mts, belonging to Pradeep Navik Property 19 Agriculture land admeasuring sq. mts at block no. 478, , village: Kudiyana, Tal: Olpad, Dist: Surat, belonging to Pradeep Navik. Additional Pledge of TDR of Rs.0.75 Lakhs with BOI as collateral apart from that mentioned above Rs Lakhs Page 225 of 370

227 Common Restrictive Covenants as per sanction letters The Company shall not without the Bank s permission in writing: Effect any adverse changes in company s capital structure. Formulate any scheme of amalgamation or merger or reconstruction. Implement any scheme of expansion on diversification or capital expenditure except normal replacements indicated in funds flow statement submitted to and approved by the bank. Enter into any borrowing or non borrowing arrangements either secured or unsecured with any other bank, Financial Institution, company, firm or otherwise or accept deposits in excess of the limits laid down by Reserve Bank of India. Invest by way of share capital or lent or advance funds to or place deposits with any other company/firm, concern including group companies/associate/persons. Normal trade credit or security deposit in the normal course of business or advance to employees can, however, be extended. Undertake guarantee obligations on behalf of any other company/firm/person. Declare dividend for any year except out of profits relating to that year after meeting all the financial commitments to the bank and making all due and necessary provisions. Make any drastic change(s) in the management set up. Approach capital market for mobilizing additional resources either in the form of debts or equity. Sell or dispose off or create security or encumbrances on the assets charged to the bank in favour of any other bank, financial institutions, company, firm, individual. Repay moneys brought in by the promoters, partners, directors, share holders, their relatives and friends in the business of the company/firm by way of deposits/loans/share application money etc. Avail credit facilities/loan from outside the bank/consortium arrangement without their knowledge and permission. Make any alterations in Company s constitution, controlling ownership or any documents relating to its constitution or in the nature of Company s business or operations during the period of subsistence of facilities. Page 226 of 370

228 2. Loan of Rs Cr sanctioned by Punjab National Bank Name of the lender Guarantor Facility Interest Rate (% p.a., unless otherwise specified) Tenor/ Repayment schedule Security Punjab National Bank Pradeep Navik Shantilal Patel Rashmiben S Patel Susanben Navik Rohan Navik Term Loan Rs Cr Term Loan BR % + TP (0.50%) Repayment schedule: Term Loan(s) term loan shall be repaid in 54 monthly installments of Rs.5.50 Lakhs. Primary First charge on the following: 11 set of Diesel Generator 125 KVA 561 nos. of Long Arm Paddle Wheel Aerators(2HP) 1.8 Lakhs sq. mts HDPE Geomembrane(500 micron) 1.8 Lakhs sq. mts HDPE lining charges Collateral: Property 1 All right title and interest in superstructure being stair cabin,duck of Lift, passage and stair case admeasuring about sq ft (carpet area) on the back side of Basement in the building "ROYAL ACCORD" together with proportionate undivided share in the land bearing land revenue survey no. 463/1 paiki final plot no. 37 paiki Town Planning scheme no. 11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 2 All right title and interest in superstructure being stair cabin, Duck of Lift, passage and stair case admeasuring about sq, fts.(carpet area) on the back side of Ground floor in the building ROYAL ACCORD" together with proportionate undivided share in the land bearing land Revenue Survey no. 463/1 paiki final plot no. 37 paiki, Town Planning scheme no. 11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 3 All right title and interest in superstructure being stair cabin, Duck of Lift, passage and stair case admeasuring about sq, fts.(carpet area) on back side of First floor in the building "ROYAL ACCORD" together with proportionate undivided share in the land bearing land revenue survey no. 463/1 paiki, final plot no. 37 paiki of Town Planning scheme no. 11 Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Page 227 of 370

229 Property 4 All right title and interest in the superstructure being Second Floor admeasuring about 3767 sq. fts. (carpet area ) in the building "ROYAL ACCORD" together with proportionate undivided in share admeasuring about 180 sq mts in the land bearing land revenue survey no. 463/1 paiki final plot no. 37 paiki of Town Planning scheme no.11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 5 All right title and interest in the superstructure being Third floor admeasuring about 3617 sq. fts. (carpet area) in building "ROYAL ACCORD" together with proportionate undivided share admeasuring about 180 sq. mtrs.in the land bearing land revenue survey no. 463/1 paiki final plot no. 37 paiki of Town Planning scheme no. 11. Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 6 All right title and interest in the superstructure fourth floor portion admeasuring about 1250 sq. fts. (carpet area) together with adjoining terrace admeasuring about 2840 sq. fts. (carpet area) in building "ROYAL ACCORD" together with proportionate undivided share admeasuring about 120 sq. mtrs.in the land bearing land bearing revenue survey no. 463/1 paiki final plot no. 37 paiki of Town Planning scheme no. 11, Mouje Adajan, Taluka City, District Surat, belonging to Mr. Pradeep R Navik Property 7 All rights, title and interest in the flat No. G-l Ground Floor in the building "Versova Sea-side Premises Cooperative Housing Society. Ltd." constructed on the plot No. 17, CTS No. 1055, Jayprakash Road, Andheri (W) Mumbai , belonging to Mr. Pradeep R Navik. Property 8 All that piece and parcels of the land of bungalow no. 15 admeasuring about sq. mtrs. together with constructions thereupon on the ground floor and first floor admeasuring about sq mtrs in Shree Sugam Cooperative Housing Society Ltd, together with easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land Revenue survey no. 462/1, 461/3 and 461/4 paiki, Mouje Adajan, Taluka City, District Surat, belonging to Mrs Susanben Navik Property 9 All that the pieces and parcels of Flat no. 601on the 6 th floor admeasuring about 1150 sq.fts.(super build up area) in the building Jamna Apartment of Jamna Apartment Cooperative Housing Society ltd, together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land revenue Survey no.464/a paiki, Final Plot no. 1 and 3 paiki of Town Planning scheme no. 12, Mouje Adajan, Taluka City, District Surat, belonging to Mrs Susanben Navik Property 10 All that the pieces and parcels of Flat no. 606 on the 6 th floor admeasuring about 700 sq. fts.( super built up area i.e. 588 sq. fts) in the building Ganga Jamna Apartment of Jamna Apartment Cooperative Housing Society Ltd, together Page 228 of 370

230 with all easements, privileges, rights and benefits attached thereto, situated being and lying on the land Revenue Survey no. 464/A paiki, Final Plot no. 1 and 3 paiki of Town Planning scheme no. 12, Mouje Adajan, Taluka City, District Surat, belonging to Mrs Susanben Navik Property 11 All that the piece and parcels of land and building bearing bungalow no. 11 admeasuring about sq. mtrs, of "SHREE SUGAM SOCIETY" situated on the land bearing Revenue survey no. 462/1, 461/3 and 461/4 paiki Mouje Adajan, Taluka City, District Surat, belonging to Mr Pradeep R Navik and Mrs Susanben Navik Property 12 All that piece and parcels of the land and building bearing Awas No. 46 and 47 admeasuring about sq.mtrs, together with constructions thereon, both present and future, together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land Revenue survey no. 5/A, Block No. 4 paiki Mouje Jahangirpura, Taluka City District Surat, belonging to Mr Shantilal Ishwarbhai Patel Property 13 All that piece and parcels of the land and building bearing Awas No. 62 admeasuring about 80 sq.mtrs together with constructions thereon together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land Revenue Survey No. 14/A+, Mouje Pisad, Taluka Choryasi, District Surat, belonging to Mr Shantilal Ishwarbhai Patel Property 14 All that pieces and parcels of the land and building bearing Awas No 38 admeasuring about sq mtrs together with constructions thereon together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto, situated, being and lying on the land revenue survey no 5/A, Block No 4, paiki, Mouje Jahangirpura, Taluka City, District Surat, belonging to Mrs Rashmiben Shantilal Patel Property 15 All that piece and parcels of the leasehold land Plot No. 4 & 5 admeasuring about 793 Sq. mts.together with constructions thereon and together with plant and machinery embedded to earth or permanently fastened to anything attached to earth and together with all easements, privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto situated, being and lying at pad Industrial Area of Gujarat Industrial Development Corporation situated on the land bearing Revenue Survey No, 6/P, Mouje Asnabad, Taluka Olpad, District: Surat., belonging to M/s Zeal Aqua Pvt Ltd Property 16 Belonging to Mr Shantilal Ishwarbhai Patel and Mrs Rashmiben Shantilal Patel] All that the pieces and parcels of the non agricultural land admeasuring 546 sq mts adjoining the land of Awas No 62, together with constructions thereon, situated, being and lying on the non agriculture land revenue survey no 14/A+B, situate, being and lying at Mouje pisad Taluka Choryasi, District Surat together with all easements, Page 229 of 370

231 Amount outstanding as on December 31, 2014 privileges, rights and benefits attached thereto or enjoyed therewith or appurtenant thereto and bounded as under: East: Surat Olpad road West: Awas No 61 Property 17 Registered Mortgage of Agriculture land at block no. 470, village: Kudiyana, Tal: Olpad, Dist: Surat, admeasuring sq. mts belonging to Mr. Pradeep Navik Property 18 Registered Mortgage of Agriculture land at block no. 477, village: Kudiyana, Tal: Olpad, Dist: Surat, admeasuring 4654 sq mts, belonging to Pradeep Navik Property 19 Agriculture land admeasuring sq. mts at block no. 478, , village: Kudiyana, Tal: Olpad, Dist: Surat, belonging to Pradeep Navik. Rs Lakhs Page 230 of 370

232 Restrictive Covenants as per sanction letter The company/firm shall not without the Bank s permission in writing: Effect any adverse changes in company s capital structure. Formulate any scheme of amalgamation or merger or reconstruction. Implement any scheme of expansion on diversification or capital expenditure except normal replacements indicated in funds flow statement submitted to and approved by the bank. Enter into any borrowing or non borrowing arrangements either secured or unsecured with any other bank, Financial Institution, company, firm or otherwise or accept deposits in excess of the limits laid down by Reserve Bank of India. Invest by way of share capital or lent or advance funds to or place deposits with any other company/firm, concern including group companies/associate/persons. Normal trade credit or security deposit in the normal course of business or advance to employees can, however, be extended. Undertake guarantee obligations on behalf of any other company/firm/person. Declare dividend for any year except out of profits relating to that year after meeting all the financial commitments to the bank and making all due and necessary provisions. Make any drastic change(s) in the management set up. Approach capital market for mobilizing additional resources either in the form of debts or equity. Sell or dispose off or create security or encumbrances on the assets charged to the bank in favour of any other bank, financial institutions, company, firm, individual. Repay moneys brought in by the promoters, partners, directors, share holders, their relatives and friends in the business of the company/firm by way of deposits/loans/share application money etc. Avail credit facilities/loan from outside the bank/consortium arrangement without their knowledge and permission. Page 231 of 370

233 3. Details of Vehicle Loan Outstanding as on Repayment Bank Loan amount Rate of interest Security December 31, 2014 (Rs schedule/tenure in Lakhs) Kotak Mahindra Prime Rs.7.00 Lakhs [ ] 36 months Innova 5.27 Bank of India Rs Lakhs 0.30% above BR presently 10.55% p.a or at such rate stipulated by bank Bank of India Rs.5.00 Lakhs 0.45% above BR presently 10.65% p.a or at such rate stipulated by bank 84 EMI s Hypothecation of Four Wheeler; Toyota Fortuner 4*2 Guarantor Name: Mr. Pradeep R Navik 60 EMI s Hypothecation of Four Wheeler; Maruti Suzuki, SWIFTVXI Allahabad Bank Rs Lakhs BR+0.50% pawmr 84 months Hypothecation of three vehicle (3 Dusters RXZ 85PS) costing Rs.34,41,306/- Indusind Bank Limited [ ] [ ] 36 months Tractor 4.27 Bank of India [ ] [ ] [ ] Tata Xenon 4.11 Bank of India [ ] [ ] [ ] Audi A B. Un-Secured Borrowings As on December 31, 2014, our Company had unsecured borrowings of: Sr. No. Name of lender Rs (in Lakhs) 1 Pradeep Navik Rashmiben Patel Rohan Navik Susanben Navik Shantilal Patel 1.34 Page 232 of 370

234 Sr. No. Name of lender Rs (in Lakhs) 6 Kimi Patel Dhaval Patel Mary Moses Preety Mistry 9.07 [A] Loans and Advances From Others (Unsecured) Loans & Advances from Financial Institutions 1 Bajaj Finance Ltd Religare Finvest Ltd Other Loans and Advances, Unsecured 1 Jagdish Navik Kalaben Khalasi Lalabhai Khalasi Ramnik Khalasi Mukesh Khalasi Agave Tradecom Pvt Ltd [B] Grand Total [C] = [A]+ [B] Page 233 of 370

235 SECTION VI LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS Except as stated below, there are no outstanding litigations, suits, civil or criminal prosecutions, proceedings before any judicial, quasi-judicial, arbitral or administrative tribunals, including pending proceedings for violation of statutory regulations or, alleging criminal or economic offences or tax liabilities or any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of Part 1 of Schedule XIII of the Companies Act, 1956 or Schedule V of the Companies Act, 2013) against our Company, our Directors and our Promoter that would have a material adverse effect on our business. There are no defaults, non-payments or overdue of statutory dues, institutional/bank dues and dues payable to holders of debentures or fixed deposits and arrears of cumulative preference shares that would have a material adverse effect on our business. CONTINGENT LIABILITIES OF OUR COMPANY Sr. No. Particulars Amount 1. Assessment Order dated March 27, 2015 Rs.1,76,78,940/- 2. Show cause notice dated January 27, 2015 Unascertainable LITIGATION RELATING TO OUR COMPANY A. LITIGATIONS FILED AGAINST OUR COMPANY 1. Litigation Involving Civil Laws: NIL 2. Litigation Involving Criminal Laws. NIL 3. Litigation involving Securities and Economic Laws NIL 4. Litigation involving Statutory Laws NIL 5. Litigation involving Labour Laws NIL 6. Litigation involving Tax Liabilities Assessment Order dated March 27, 2015 of the Assistant Commissioner of Income-tax Circle-2(1)(1), Surat The Assistant Commissioner of Income-tax Circle-2(1)(1), Surat has passed Assessment Order dated March 27, 2015 in respect of Assessment Year against the Company. In terms of the said Assessment Order, the Assistant Commissioner of Income-tax held vide provisions of Income Tax Act including section 68, that the share capital and share premium of Rs. 4,00,00,000 Page 234 of 370

236 received by our Company in past, will be considered as Income as the explanation offered by the Company has not only been found unsatisfactory but also incorrect as per the inquiry conducted by the department of Income Tax. Further, there are certain unexplained expenditures, capital expenditure and late payment of Employee Contribution towards Provident Fund; which are being disallowed by the Assistant Commissioner, IT and are added back to our Income. The total taxable income of the Company is recalculated as Rs.5,84,14,730/- for the said assessment year by the Assistant Commissioner, IT. The Assistant Commissioner of Income-tax has raised a demand for a sum of Rs.1,76,78,940/- against the Company as the tax payable by the Company. The Company comtemplates to challenge this demand by filing an Appeal against the Assessment Order. Further, penalty proceedings under section 271(1)(c) read with section 274 of the Income Tax Act, for furnishing inaccurate particulars and concealment of income are also being initiated against our Company. Show Cause Notice dated January 27, 2015 of the Assistant Commissioner of Commercial Tax (2), Surat The Assistant Commissioner of Commercial Tax (2), Surat has issued A Show Cause Notice dated January 27, 2015 against the Company in respect of Financial Year In terms of the said notice, the Assistant Commissioner of Commercial Tax (2), Surat has called upon the Company to show cause as to why commercial tax at the rate of 15% not be charged in respect of Aquatic Feeds sold by the Company during the Financial Year Pursuant to the hearing held in the matter, the Company is awaiting the final order. B. LITIGATIONS FILED BY OUR COMPANY 1. Litigation involving Civil Laws: NIL 2. Litigation Involving Criminal Laws: NIL 3. Litigation Involving Securities and Economic Laws: NIL 4. Litigation Involving Statutory Laws: NIL 5. Litigation Involving Labour Laws: NIL 6. Litigation involving Tax Liabilities NIL Page 235 of 370

237 C. PAST PENALTIES NIL LITIGATION RELATING TO OUR DIRECTORS A. LITIGATIONS FILED AGAINST OUR DIRECTORS 1. Litigation involving Civil/Statutory Laws NIL 2. Litigation involving Criminal Laws. NIL 3. Litigation Involving Economic Offences. NIL 4. Litigation involving Tax Liabilities. NIL 5. Litigation involving Statutory Laws NIL B. LITIGATION FILED BY OUR DIRECTORS 1. Litigation involving Civil Laws NIL 2. Litigation involving Criminal Laws. NIL 3. Litigation Involving Economic Offences. NIL 4. Litigation involving Tax Liabilities. NIL 5. Litigation involving Statutory Laws NIL Page 236 of 370

238 C. PAST PENALTIES NIL LITIGATION RELATING TO OUR PROMOTERS A. LITIGATION FILED AGAINST OUR PROMOTERS 1. Litigation involving Civil/Statutory Laws. NIL 2. Litigation involving Criminal Laws. NIL 3. Litigation Involving Securities and Economic Laws. NIL B. LITIGATION FILED BY OUR PROMOTERS 1. Litigation Involving Civil/Statutory Laws. NIL 2. Litigation Involving Criminal Laws. NIL 3. Litigation Involving Securities and Economic Laws. NIL C. PAST PENALTIES NIL LITIGATION RELATING TO OUR GROUP COMPANIES A. LITIGATION FILED AGAINST OUR GROUP COMPANIES 1. Litigation involving Civil Laws. NIL 2. Litigation involving Criminal Laws. NIL Page 237 of 370

239 3. Litigation Involving Securities and Economic Laws. NIL B. LITIGATION FILED BY OUR GROUP COMPANIES 1. Litigation involving Civil Laws. NIL 2. Litigation involving Criminal Laws. NIL 3. Litigation Involving Securities and Economic Laws. NIL C. PAST PENALTIES NIL LEGAL NOTICES 1. Legal notices issued to our Company NIL 2. Legal Notices issued by our Company NIL AMOUNTS OWED TO SMALL SCALE UNDERTAKINGS AND OTHER CREDITORS Except for entities disclosed below, as on December 31, 2014, Company do not owe a sum exceeding Rs. 1,00,000/- (Rupees One Lakh) to any small scale undertaking which is outstanding for more than 30 (thirty) days. Name of the Creditors Amount Name of the Creditors Amount Aak Aqua Farm Aditya Birla Chemicals (India) Limited Aditya Birla Chemicals (India) Ltd ( Rehla) Dakshin Gujarat Vij Company Limited Damaavand Autopower Dedaram R. Choudhary 2.37 Amazing Biotech Pvt Ltd 0.95 Deep Electricals 0.05 APC Nutrients Private Limited 3.85 Desh Automation 0.56 Aqua Bio Technolgies 0.32 Dhruvi Enterprise 0.00 Biomed Techno Ventures 3.10 Dineshkumar Ratilal Patel 0.27 C.D Aqua Farm Gellabhai Leemba Patel 4.39 Page 238 of 370

240 Name of the Creditors Amount Name of the Creditors Amount Dak Aqua Farm 6.78 Gopalsingh M Rajpurohit 0.65 Dharam Aqua Hariom Agency Dharmendra Hariom Carriers & Logistics 0.62 Divesh Aqua Farm Jalaram Transport 1.15 Durga Jay Jaldhara Water 0.27 DVR Aqua Farm Jay Water Supply 0.84 Girishbhai' Jayantibhai Kanubhai Chaudhary 0.28 Grasim Industries Ltd.(Bharuch) 1.82 Jayeshkumar Pravinkumar Patel 0.65 Growel Formulations Private Limited 0.52 Jaykay Aqua Tech 0.30 International Healthcare Limited 4.04 Jems Impex 0.53 Kamlesh Aqua Farm Jignesh S Patel 0.57 Kapila Aqua Farm Jitendra B. Gajjar 0.57 Leelaben Kalubhai J Patel 0.48 Mahi Aqua P. Ltd Kamleshbhai Zinabhai Patel 0.52 Nimesha Aqua Farm Kanaram H Godara 6.29 Nitin Aqua Farm Kandoi Transport Ltd 0.52 Om Kartik Aqua Farm 6.47 Kishan Machinery Stores 0.57 P.V.S. Laboratories Limited 0.80 Kishorbhai Haribhai Morkar 0.26 Pankaj Katpore Laxmi Metals & Eng.Co 0.06 PHR Aqua Farm M.S Enterprises 5.61 Poseidon Aquatech Pvt Ltd 2.95 Maharshree Geosynthetics 3.36 Poseidon Biotech 1.85 Mahavir Pipe Industries 0.34 Raj( Ashirwad) Mayur Water Supply 1.14 Salem Microbes Private Ltd 0.81 Mehta Sons 0.05 Sanzyme Ltd-Probact Division 8.83 Miral Transport 0.04 SDC Agro Vet (India) Pvt. Ltd Modh & Co 0.50 SHR Aqua Farm Mumtaj Irfan Shaikh 0.62 Sobhana Aqua Farm N.N.Thakore 0.02 Sonal Aqua Farm Nayan Sheth 0.10 Sumitra Aqua Farm New Ramdev Steel Center 0.02 Swastik Lime 0.16 Ocean Aqua Solution 0.05 Synergy Biotechnologies 2.36 Olpad Ice Factory 3.17 Vaishakhi Bio - Resources (P) Ltd Om Glass & Alum Fab 0.09 Vanita Aqua Farm Om Trading Co Page 239 of 370

241 Name of the Creditors Amount Name of the Creditors Amount Venkata Sai Hatcheries Paresh Trading Company 1.26 Aastha Petroleum 1.32 Pukharam Laburam Choudhary 8.34 Almas Shaikh 0.06 Rafik Gani Popat 0.10 Amazing Values 0.05 Rajkot Machinery Stores 0.02 Ankur Steel Fabrications 0.07 Ramanbhai H Patel 0.13 Babubhai Haribhai Vaghora 1.35 Ramdas S. Gupta 0.28 Bachubhai M Sakliya 0.01 Rameshbhai Kikabhai Khalasi 0.28 Bahadur Manasinh 0.45 Rameshbhai S Khalasi 0.19 Balaji Hardware & Plywood 0.39 Rayli Water Supplyer 0.54 Bardoliwala Traders 0.67 Royal Plastics 0.21 Bharti Enterprise 2.24 S.N.Pandey 0.67 Bhatt Brothers 0.01 Sagar Aqua 3.52 Blue Bell Tours and Travels 0.04 Shanti Aqua 2.39 BM Logistics 1.24 Shivam Power 0.01 Chhaganbhai Kikabhai Bhagwagar 0.30 Shree Jalaram Plastic & Glass Ware 0.04 Choutha Ram 0.95 Shree Light House 0.08 Contractor-Anunaykumar Singh 5.84 Shree Mahalaxmi Saw Mill 3.72 Contractor-Budhua Oram 7.82 Shreeji Automart Pvt Ltd 0.05 Contractor-Chaganlal N Rajpurahit 0.43 Shreeji Computer Consultancy 0.21 Contractor-Harish G Rathod 3.07 Shri Rang Carting 8.99 Contractor-Mahendra R Patel 3.24 Shyamlal Vansharaj Prasad 0.53 Contractor-Manhar N Rathod 2.37 Sitaram Roadlines 0.14 Contractor-Manoj Minz 3.09 Sony Fastners 0.02 Contractor-Merianus Tapo 7.10 Susanben Pradeepbhai Navik (Delasa) Contractor-Padman A Singh 0.51 Swastik Chemical Lime Suppliers 0.27 Contractor-Prakash Majhi 8.61 Swastik Engineering Works 0.00 Contractor-Rajesh Kujur 0.70 Victory Enterprise 0.04 Contractor-Raviranjan Singh 0.17 Zil Carting 0.08 Contractor-Silvirius Kajur 7.19 Total MATERIAL DEVELOPMENTS OCCURING AFTER LAST BALANCE SHEET DATE, i.e. DECEMBER 31, 2014 Except as described in this Draft Prospectus, and as more particularly set-out in Part 2(A)(6) of this chapter titled Outstanding Litigation and Material Developments, to our knowledge, there have been no material developments, since the date of the last audited balance sheet. Page 240 of 370

242 GOVERNMENT AND OTHER STATUTORY APPROVALS In view of the licenses / permissions / approvals / no-objections / certifications / registrations, (collectively Authorisations ) listed below, our Company can undertake this issue and our current business activities and to the best of our knowledge, no further approvals from any governmental or regulatory authority or any other entity are required to undertake this Issue or continue our business activities. Unless otherwise stated, these approvals are all valid as of the date of this Draft Prospectus. It must be distinctly understood that, in granting these approvals, the GoI, the RBI or any other authority does not take any responsibility for our financial soundness or for the correctness of any of the statements made or opinions expressed in this behalf. For further details in connection with the regulatory and legal framework within which we operate, please refer to the chapter titled Key Industry Regulations and Policies on page 127 of this Draft Prospectus. The following are the details of licenses, permissions and approvals obtained by the Company under various Central and State Laws for carrying out its business: APPROVALS PERTAINING TO THIS ISSUE 1. The Board of Directors have, pursuant to Section 62 (1)(c) of the Companies Act, 2013 by a resolution passed at its meeting held on March 25, 2015 authorized the Issue, subject to the approval of the shareholders and such other authorities as may be necessary. 2. The shareholders of the Company have, pursuant Section 62 (1)(c) of the Companies Act, 2013 by a special resolution passed in the Annual General Meeting held on March 25, 2015 authorized the further issue of Equity Shares. 3. The Company has obtained in-principle listing approval from the SME platform of the BSE dated [ ], The Company has entered into an agreement dated [ ] with the Central Depository Services (India) Limited ( CDSL ) and the Registrar and Transfer Agent, who in this case is Bigshare Services Private Limited, for the dematerialization of its shares. 5. Similarly, the Company has also entered into an agreement dated [ ] with the National Securities Depository Limited ( NSDL ) and the Registrar and Transfer Agent, who in this case is Bigshare Services Private Limited, for the dematerialization of its shares. 6. The Company's International Securities Identification Number ( ISIN ) is [ ]. INCORPORATION AND OTHER DETAILS 1. Certificate of Incorporation dated March 6, 2009 issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli in the name of Zeal Aqua Private Limited. 2. Fresh Certificate of Incorporation dated March 31, 2015 issued by the Registrar of Companies, Ahmedabad, consequent upon change of name from Zeal Aqua Private Limited to Zeal Aqua Limited bearing CIN U05004GJ2009PLC The Corporate Identity Number ( CIN ) of the Company was U05004GJ2009PTC The Corporate Identity Number (CIN) of the Company after conversion to public limited company is U05004GJ2009PLC Page 241 of 370

243 TAX RELATED APPROVALS/ LICENSES/ REGISTRATIONS The Company has in place the following categories of approvals from various tax authorities viz. Income-tax Department, Sales tax Department of various States in India, etc Sr. No. 1. Sr. No. Sr. No. Description Permanent Account Number (PAN) Tax Deduction Account Number (TAN) Service Tax Registration (Form ST-2) Description Certificate of Registration Description Certificate of Registration General Granting Registration Authority Number The Income Tax Department, AAACZ3674J Government of India. The Income Tax Department, SRTZ00103F Government of India. Central Board of Excise and Customs, Ministry of AAACZ3674JSD001 Finance Department of Revenue Value Added Tax Granting Registration Authority Number Assistant Commissioner of Commercial Tax Central Sales Tax Granting Registration Authority Number Commissioner of Commercial Tax Date of Certificate March 6, 2009 [ ] March 24, 2015 Effective Date March 20, 2009 Effective Date April 15, 2009 Date of Expiry Valid until cancelled Valid until cancelled Valid until cancelled Date of Expiry Valid until cancelled Date of Expiry Valid until cancelled Page 242 of 370

244 1. 2. Sr. No. Description Professional Tax Registration Certificate under the Gujarat Panchayats, Municipalities, Municipal Corporations and State Tax on Professions, Traders, Callings and Employments Act, 1976 Certificate of Enrolment under the Gujarat Panchayats, Municipalities, Municipal Corporations and State Tax on Professions, Traders, Callings and Employments Act, 1976 S. No. Description 1. Certificate of Importer- Exporter Code (IEC) Granting Authority Profession Tax Registration Number Date of Certificate [ ] [ ] [ ] [ ] Talati cum Mantri, Olpad PEP Import - Export Related Approvals Granting Particulars Authority Foreign Trade Development Officer IEC Number: Date of Issue: December 31, 2012 April 4, 2015 Date of Certificate December 31, 2012 Date of Expiry Valid until cancelled Date of Expiry NA Page 243 of 370

245 LABOUR RELATED APPROVALS/REGISTRATIONS The Company has obtained the following approvals related to Labour/employment related registrations: Sr.No. 1. Description Employees Provident Fund Code Granting Authority Assistant Provident Fund Commissioner Registration/ Reference No. Code No. GJ/SRT/39446 Date of Issue February 9, 2011 Effective Date: April 1, 2011 Date of Expiry NA BUSINESS RELATED APPROVALS The Company conducts its business related activities on farms owned by various farmers who have obtained the required Certificates of Registrations for Coastal Aquaculture under the Coastal Aquaculture Authority Act, 2005 from the Coastal Aquaculture Authority, Government of India, Ministry of Agriculture. The details of the same are as below: Sr. No. Registration No. Granted To Date 1. GJ-II-2009(264) Shri Ishwarbhai Valabhai Patel October 19, GJ-II-2009(269) Shri Chhaganlal Kikabhai Bhagwakar October 19, GJ-II-2009(301) Shri Manoj Mohanlal Sharma October 19, GJ-II-2009(302) Shri. Susanben Pradeep Navik October 19, GJ-II-2008(0120) Shri Bhavesh Pravinchandra Mahatma August 04, GJ-II-2008(0122) Shri Seema Harish Chandra Bharucha August 04, GJ-II-2011(588) Shri Jayesh Pravinbhai Patel August 23, GJ-II-2009(408) Shri Maheshbhai Lallubhai Umarvanshi October 19, GJ-II-2009(407) Shri Kalidas Ramanbhai Rathod October 19, GJ-II-2009(303) Shri Dinesh Kumar Ratilal Patel October 19, GJ-II-2009(316) Shri Rajeshbhai Kanubhai Choudhary October 19, GJ-II-2009(404) Shri Champakbhai Durlabhbhai Patel October 19, GJ-II-2009(403) Shri Rameshbhai Ukkadbhai Khalasi October 19, GJ-II-2009(402) Shri Somabhai Valabhai Khalasi October 19, GJ-II-2009(401) Shri Bhanbhai Lalabhai Khalasi October 19, GJ-II-2009(397) Shri Parbhubhai Bavjibhai Sarang October 19, GJ-II-2009(396) Shri Ramnikbhai Somabhai Khalasi October 19, GJ-II-2009(357) Shri Kishor Kumar Harilal Morkar October 19, GJ-II-2009(317) Shri Jayantibhai Kanubhai Choudhary October 19, GJ-II-2009(345) Shri Pravinbhai Kikubhai Bhagwakar October 19, GJ-II-2009(405) Shri Champakbhai Khalasi October 19, 2009 The above approvals are valid for a period of 5 years from the date of the registration. All the persons mentioned above have applied for renewal of their respective certificates. Page 244 of 370

246 APPROVALS RELATING TO INTELLECTUAL PROPERTY TRADEMARKS Sr. No. Particulars of Mark Word/ Label Mark/Device Applicant Date of Registration Trademark No. Class Status Goods/ Services in respect of which Application has been made 1. ZEAL Word The Company May 6, Registered Agricultural, animal feed supplement, horticultural and forestry products and grains, feed supplement for aquatic animals like fish prawns and live animals, fresh fruits and vegetables, seeds, natural plants and flowers foodstuffs for animals, malt as included in Class 31. Page 245 of 370

247 PENDING APPROVALS The company has applied for the following approvals that are pending registration: TRADEMARKS S. No. Particulars of Mark Word/ Label Mark/Device Applicant Date of Application Application No. Class Status Goods/ Services in respect of which Application has been made 1. Device The Company August 12, Pending Agricultural, Animal Feed Supplement, Horticultural and Forestry Products and Grains, Feed Supplement for Aquatic Animals Like Fish / Prawns and Live Animals, Fresh Fruits and Vegetables, Seeds, Natural Plants and Flowers; Foodstuffs for animals, malt as included in Class We have also applied for issuance of copyright certificate for the artistic work in our logo. APPROVALS REQUIRED TO BE OBTAINED BY THE COMPANY, BUT NOT APPLIED FOR: 1. Registration under Gujarat Shops and Establishments Act, 1948, in respect of the Registered Office of the Company located at Plot No.4/5, GIDC, Taluka Olpad, Surat, Gujarat Registration, as a principal employer, under Contract Labour (Regulation and Abolition) Act, 1970 The Company is in the process of application of the above approvals Page 246 of 370

248 OTHER REGULATORY AND STATUTORY DISCLOSURES AUTHORITY FOR THE ISSUE The Issue has been authorized by a resolution passed by our Board of Directors at its meeting held on March 25, 2015 and by the shareholders of our Company by a special resolution, pursuant to Section 62 of the Companies Act, 2013 passed at the EGM of our Company held on March 25, 2015 at registered office of our Company. PROHIBITION BY SEBI, RBI OR OTHER GOVERNMENTAL AUTHORITIES Our Company, our Promoters, our Directors, our Promoter Group and our Group Entity(s), have not been prohibited from accessing or operating in capital markets under any order or direction passed by SEBI or any other regulatory or Governmental Authority. The companies with which our Promoters, our Directors or persons in control of our Company are/ were associated as promoters, directors or persons in control have not been prohibited from accessing or operating in capital markets under any order or direction passed by SEBI or any other regulatory or Governmental Authority. None of our Directors are in any manner associated with the securities market. There has been no action taken by SEBI against any of our Directors or any entity our Directors are associated with as directors. PROHIBITION BY RBI Neither our Company, nor our Promoters, or the relatives (as defined under the Companies Act) of our Promoters or Group Entity have been identified as wilful defaulters by the RBI or any other governmental authority. There are no violations of securities laws committed by them in the past or no proceedings thereof are pending against them. ELIGIBILITY FOR THIS ISSUE Our Company is eligible for the Issue in accordance with regulation 106 M(1) and other provisions of chapter XB of the SEBI (ICDR) Regulations as the post issue face value capital does not exceed Rs. 1,000 lakhs. Our Company also complies with the eligibility conditions laid by the SME Platform of BSE for listing of our Equity Shares. We confirm that: 1. In accordance with regulation 106(P) of the SEBI (ICDR) Regulations, this Issue will be hundred percent underwritten and that the LM will underwrite at least 15% of the total issue size. For further details pertaining to underwriting please refer to chapter titled General Information beginning on page 49 of this Draft Prospectus. 2. In accordance with Regulation 106(R) of the SEBI (ICDR) Regulations, we shall ensure that the total number of proposed allottees in the Issue is greater than or equal to fifty, otherwise, the entire application money will be refunded forthwith. If such money is not repaid within eight days from the date our company becomes liable to repay it, than our company and every officer in default shall, on and from expiry of eight days, be liable to repay such application money, with interest as prescribed under section 40 of the Companies Act, 2013 Page 247 of 370

249 3. In accordance with Regulation 106(O) the SEBI (ICDR) Regulations, we have not filed any Offer Document with SEBI nor has SEBI issued any observations on our Offer Document. Also, we shall ensure that our Lead Manager submits the copy of Draft Prospectus along with a Due Diligence Certificate including additional confirmations as required to SEBI at the time of filing the Draft Prospectus with Stock Exchange and the Registrar of Companies. 4. In accordance with Regulation 106(V) of the SEBI ICDR Regulations, the LM will ensure compulsory market making for a minimum period of three years from the date of listing of Equity Shares offered in the Issue. For further details of the market making arrangement see chapter titled General Information beginning on page 49 of this Draft Prospectus. 5. The Company has Net Tangible assets of at least Rs. 3 crore as per the latest audited financial results. 6. The Net worth (excluding revaluation reserves) of the Company is at least Rs. 3 crore as per the latest audited financial results. 7. The Company has track record of distributable profits in terms of section 123 of Companies Act for at least two years out of immediately preceding three financial years and each financial year has a period of at least 12 months. 8. The distributable Profit, Net tangible Assets and Net worth of the Company as per the restated financial statements for the nine months ended December and for the financial year ended as at March 31, 2014, 2013 and 2012 is as set forth below:- (Rs. In lakhs) Particulars December 31 March 31, March 31, March 31, Distributable Profits* Net Tangible Assets** 2, , , , Net Worth*** * Distributable profits have been computed in terms section 123 of the Companies Act, ** Net tangible assets are defined as the sum of all net assets (i.e. non current assets, current assets less current liabilities) of our Company, excluding intangible assets as defined in Accounting Standard 26 (AS 26) issued by the Institute of Chartered Accountants of India ***Net worth has been defined as the aggregate of the paid up share capital, share application money (excluding the portion included in other current liabilities) and reserves and surplus excluding miscellaneous expenditure, if any 9. The Post-issue paid up capital of the Company shall be at least Rs. 3 Crore. 10. The Company shall mandatorily facilitate trading in demat securities and is in the process of entering into an agreement with both the depositories. 11. The Company has not been referred to Board for Industrial and Financial Reconstruction. 12. No petition for winding up is admitted by a court of competent jurisdiction against the Company. 13. No material regulatory or disciplinary action has been taken by any stock exchange or regulatory authority in the past three years against the Company. 14. The Company has a website There has been no change in the promoter(s) of the Company in the one year preceding the date of filing application to BSE for listing on SME segment. Page 248 of 370

250 We further confirm that we shall be complying with all the other requirements as laid down for such an Issue under Chapter X-B of SEBI (ICDR) Regulations and subsequent circulars and guidelines issued by SEBI and the Stock Exchange. As per Regulation 106(M)(3) of SEBI (ICDR) Regulations, 2009, the provisions of Regulations 6(1), 6(2), 6(3), Regulation 7, Regulation 8, Regulation 9, Regulation 10, Regulation 25, Regulation 26, Regulation 27 and Sub regulation (1) of Regulation 49 of SEBI (ICDR) Regulations, 2009 shall not apply to us in this Issue. DISCLAIMER CLAUSE OF SEBI IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE OFFER DOCUMENT TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED TO MEAN THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THIS ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. THE LEAD MANAGER, PANTOMATH CAPITAL ADVISORS PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE OFFER DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS FOR THE TIME BEING IN FORCE. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS DRAFT PROSPECTUS, THE LEAD MANAGER, PANTOMATH CAPITAL ADVISORS PRIVATE LIMITED, IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, PANTOMATH CAPITAL ADVISORS PRIVATE LIMITED, HAS FURNISHED TO STOCK EXCHANGE/SEBI A DUE DILIGENCE CERTIFICATE IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, WE, THE UNDER NOTED LEAD MANAGER TO THE ABOVE MENTIONED FORTHCOMING ISSUE STATE AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT PROSPECTUS PERTAINING TO THE SAID ISSUE; 2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE ISSUER, WE CONFIRM THAT: A. THE DRAFT PROSPECTUS FILED WITH THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; Page 249 of 370

251 B. ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND C. THE DISCLOSURES MADE IN THE DRAFT PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 2013, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS. 3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT PROSPECTUS ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID. 4. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFILL THEIR UNDERWRITING COMMITMENTS. 5. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTER DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT PROSPECTUS WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT PROSPECTUS. 6. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT PROSPECTUS. 7. WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. NOT APPLICABLE 8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE MAIN OBJECTS LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE Page 250 of 370

252 ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION. 9. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 40 OF THE COMPANIES ACT, 2013 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE DRAFT PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION NOTED FOR COMPLIANCE 10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE.- NOT APPLICABLE 11. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION. 12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT PROSPECTUS: A. AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER AND B. AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME. 13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE. 14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE THAT HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OF THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE, ETC. 15. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT PROSPECTUS WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY. 16. WE ENCLOSE STATEMENT ON PRICE INFORMATION OF PAST ISSUES HANDLED BY MERCHANT BANKERS AS PER FORMAT SPECIFIED BY THE BOARD (SEBI) THROUGH CIRCULAR DETAILS ARE ENCLOSED IN ANNEXURE A Page 251 of 370

253 17. WE CERTIFY THAT PROFITS FROM RELATED PARTY TRANSACTION HAVE ARISEN FROM LEGITIMATE BUSINESS TRANSACTIONS. ADDITIONAL CONFIRMATIONS/ CERTIFICATION TO BE GIVEN BY MERCHANT BANKER IN DUE DILIGENCE CERTIFICATE TO BE GIVEN ALONG WITH OFFER DOCUMENT REGARDING SME EXCHANGE (1) WE CONFIRM THAT NONE OF THE INTERMEDIARIES NAMED IN THE DRAFT PROSPECTUS HAVE BEEN DEBARRED FROM FUNCTIONING BY ANY REGULATORY AUTHORITY. (2) WE CONFIRM THAT ALL THE MATERIAL DISCLOSURES IN RESPECT OF THE ISSUER HAVE BEEN MADE IN DRAFT PROSPECTUS AND CERTIFY THAT ANY MATERIAL DEVELOPMENT IN THE ISSUER OR RELATING TO THE ISSUE UP TO THE COMMENCEMENT OF LISTING AND TRADING OF THE SPECIFIED SECURITIES OFFERED THROUGH THIS ISSUE SHALL BE INFORMED THROUGH PUBLIC NOTICES/ ADVERTISEMENTS IN ALL THOSE NEWSPAPERS IN WHICH PRE-ISSUE ADVERTISEMENT AND ADVERTISEMENT FOR OPENING OR CLOSURE OF THE ISSUE HAVE BEEN GIVEN. (3) WE CONFIRM THAT THE ABRIDGED PROSPECTUS CONTAINS ALL THE DISCLOSURES AS SPECIFIED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, NOTED FOR COMPLIANCE (4) WE CONFIRM THAT AGREEMENTS HAVE BEEN ENTERED INTO WITH THE DEPOSITORIES FOR DEMATERIALISATION OF THE SPECIFIED SECURITIES OF THE ISSUER. - NOTED FOR COMPLIANCE (5) WE CERTIFY THAT AS PER THE REQUIREMENTS OF FIRST PROVISO TO SUB- REGULATION OF REGULATION 32 OF SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CASH FLOW STATEMENT HAS BEEN PREPARED AND DISCLOSED IN THE DRAFT PROSPECTUS. (6) WE CONFIRM THAT UNDERWRITING AND MARKET MAKING ARRANGEMENTS AS PER REQUIREMENTS OF REGULATION 106P AND 106V OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE. Note: The filing of this Draft Prospectus does not, however, absolve our Company from any liabilities under section 34 and 36 of the Companies Act, 2013 or from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take up at any point of time, with the Lead manager any irregularities or lapses in the Draft Prospectus. All legal requirements pertaining to the Issue will be complied with at the time of registration of the Draft Prospectus with the Registrar of Companies, Ahmedabad in terms of 26, 30 and 32 of the Companies Act, Page 252 of 370

254 DISCLAIMER STATEMENT FROM OUR COMPANY AND THE LEAD MANAGER Our Company, our Directors and the Lead Manager accept no responsibility for statements made otherwise than in this Draft Prospectus or in the advertisements or any other material issued by or at instance of our Company and anyone placing reliance on any other source of information, including our website, would be doing so at his or her own risk. Caution The Lead Manager accepts no responsibility, save to the limited extent as provided in the Agreement for Issue Management entered into among the Lead Manager and our Company dated April 3, 2015 the Underwriting Agreement dated April 3, 2015 entered into among the Underwriter and our Company and the Market Making Agreement dated April 3, 2015 entered into among the Market Maker, Lead Manager and our Company. Our Company and the Lead Manager shall make all information available to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road show presentations, in research or sales reports or at collection centres, etc. The Lead Manager and its associates and affiliates may engage in transactions with and perform services for, our Company and associates of our Company in the ordinary course of business and may in future engage in the provision of services for which they may in future receive compensation. Pantomath Capital Advisors Private Limited is not an associate of the Company and is eligible to Lead Manager this Issue, under the SEBI (Merchant Bankers) Regulations, Investors who apply in this Issue will be required to confirm and will be deemed to have represented to our Company and the Underwriter and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares and will not offer, sell, pledge or transfer the Equity Shares to any person who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares. Our Company and the Lead Manager and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares. PRICE INFORMATION AND THE TRACK RECORD OF THE PAST ISSUES HANDLED BY THE LEAD MANAGER For details regarding the price information and track record of the past issue handled by M/s Pantomath Capital Advisors Private Limited, as specified in Circular reference CIR/MIRSD/1/2012 dated January 10, 2012 issued by SEBI, please refer Annexure A to this Draft Prospectus and the website of the Lead Manager at Page 253 of 370

255 DISCLAIMER IN RESPECT OF JURISDICTION This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are not minors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India and authorized to invest in shares, Indian Mutual Funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under applicable trust law and who are authorized under their constitution to hold and invest in shares, public financial institutions as specified in Section 2(72) of the Companies Act, 2013, VCFs, state industrial development corporations, insurance companies registered with Insurance Regulatory and Development Authority, provident funds (subject to applicable law) with minimum corpus of Rs. 2,500 Lakhs, pension funds with minimum corpus of Rs. 2,500 Lakhs and the National Investment Fund, and permitted non-residents including FPIs, Eligible NRIs, multilateral and bilateral development financial institutions, FVCIs and eligible foreign investors, provided that they are eligible under all applicable laws and regulations to hold Equity Shares of the Company. The Draft Prospectus does not, however, constitute an invitation to purchase shares offered hereby in any jurisdiction other than India to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this Draft Prospectus comes is required to inform himself or herself about, and to observe, any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Gujarat only. No action has been, or will be, taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that this Draft Prospectus has been filed with BSE for its observations and BSE shall give its observations in due course. Accordingly, the Equity Shares represented hereby may not be offered or sold, directly or indirectly, and this Draft Prospectus may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Draft Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of our Company since the date hereof or that the information contained herein is correct as of any time subsequent to this date. The Equity Shares have not been, and will not be, registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and applications may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Further, each applicant where required agrees that such applicant will not sell or transfer any Equity Shares or create any economic interest therein, including any off-shore derivative instruments, such as participatory notes, issued against the Equity Shares or any similar security, other than pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable laws, legislations and Draft Prospectus in each jurisdiction, including India. DISCLAIMER CLAUSE OF THE SME PLATFORM OF BSE As required, a copy of this Draft Prospectus shall be submitted to BSE. The disclaimer clause as intimated by BSE to us, post scrutiny of this Draft Prospectus, shall be included in the Prospectus prior to RoC filing. Page 254 of 370

256 FILING The Draft Prospectus has not been filed with SEBI, nor SEBI has issued any observation on the Offer Document in terms of Regulation 106(M) (3). However, a copy of the Prospectus shall be filed with SEBI at the SEBI at the Corporate Finance Department, Ahmedabad. A copy of the Prospectus, along with the documents required to be filed under Section 32 of the Companies Act, 2013 is delivered to the RoC situated at ROC Bhavan, Opp Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad LISTING In terms of Chapter XB of the SEBI (ICDR) Regulations, there is no requirement of obtaining inprinciple approval from SME Platform of BSE. However application will be made to the SME Platform of BSE for obtaining permission to deal in and for an official quotation of our Equity Shares. BSE will be the Designated Stock Exchange, with which the Basis of Allotment will be finalized. The SME Platform of BSE has given its in-principal approval for using its name in our Draft Prospectus vide its letter dated [ ] If the permissions to deal in and for an official quotation of our Equity Shares are not granted by the SME Platform of BSE, our Company will forthwith repay, without interest, all moneys received from the applicants in pursuance of the Draft Prospectus. If such money is not repaid within 8 days after our Company becomes liable to repay it (i.e. from the date of refusal or within 15 working days from the Issue Closing Date), then our Company and every Director of our Company who is an officer in default shall, on and from such expiry of 8 days, be liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under section 40 of the Companies Act, 2013 Our Company shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at the SME Platform of the BSE mentioned above are taken within twelve Working Days from the Issue Closing Date CONSENTS Consents in writing of: (a) the Directors, the Promoters, the Company Secretary & Compliance Officer, the Statutory Auditors, the Peer Reviewed Auditors, the Banker to the Company; and (b) Lead manager, Underwriters, Market Makers Registrar to the Issue, Escrow Collection Bank, Banker(s) to the Issue, Legal Advisor to the Issue to act in their respective capacities have been obtained and is filed along with a copy of the Prospectus with the RoC, as required under sections 26 and 32 of the Companies Act, 2013 and such consents shall not be withdrawn up to the time of delivery of this Prospectus for registration with the RoC. Our Peer Reviewed Auditors have given their written consent to the inclusion of their report in the form and context in which it appears in this Draft Prospectus and such consent and report shall not be withdrawn up to the time of delivery of the Prospectus for filing with the RoC. EXPERT TO THE ISSUE Except as stated below, our Company has not obtained any expert opinions: Report of the Peer Reviewed Auditor on Statement of Tax Benefits. Page 255 of 370

257 EXPENSES OF THE ISSUE The expenses of this Issue include, among others, underwriting and management fees, printing and distribution expenses, legal fees, statutory advertisement expenses and listing fees. For details of total expenses of the Issue, refer to chapter Objects of the Issue beginning on page 76 of this Draft Prospectus. DETAILS OF FEES PAYABLE Fees Payable to the Lead Manager The total fees payable to the Lead Manager will be as per the Mandate Letter dated July 10, 2014 issue by our Company to the Lead Manager, the copy of which is available for inspection at our Registered Office. Fees Payable to the Registrar to the Issue The fees payable to the Registrar to the Issue will be as per the Agreement signed by our Company and the Registrar to the Issue dated April 03, 2015 a copy of which is available for inspection at our Registered Office. The Registrar to the Issue will be reimbursed for all out-of-pocket expenses including cost of stationery, postage, stamp duty and communication expenses. Adequate funds will be provided by the Company to the Registrar to the Issue to enable them to send refund orders or allotment advice by registered post/ speed post/ under certificate of posting. Fees Payable to Others The total fees payable to the Legal Advisor, Auditor and Advertiser, etc. will be as per the terms of their respective engagement letters if any. UNDERWRITING COMMISSION, BROKERAGE AND SELLING COMMISSION The underwriting commission and selling commission for this Issue is as set out in the Underwriting Agreement entered into between our Company and the Lead Manager. Payment of underwriting commission, brokerage and selling commission would be in accordance with Section 40 of Companies Act, 2014 and the Companies (Prospectus and Allotment of Securities) Rule, PREVIOUS RIGHTS AND PUBLIC ISSUES SINCE INCORPORATION We have not made any previous rights and/or public issues since incorporation, and are an Unlisted Issuer in terms of the SEBI (ICDR) Regulations and this Issue is an Initial Public Offering in terms of the SEBI (ICDR) Regulations. PREVIOUS ISSUES OF SHARES OTHERWISE THAN FOR CASH Except as stated in the chapter titled Capital Structure beginning on page 56 of this Draft Prospectus, our Company has not issued any Equity Shares for consideration otherwise than for cash. COMMISSION AND BROKERAGE ON PREVIOUS ISSUES Since this is the initial public offer of the Equity Shares by our Company, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of our Equity Shares since our inception. Page 256 of 370

258 PARTICULARS IN REGARD TO OUR COMPANY AND OTHER LISTED COMPANIES UNDER THE SAME MANAGEMENT WITHIN THE MEANING OF SECTION 370 (1B) OF THE COMPANIES ACT, 1956 WHICH MADE ANY CAPITAL ISSUE DURING THE LAST THREE YEARS: None of the equity shares of our Group Entities are listed on any recognized stock exchange. None of the above companies have raised any capital during the past 3 years. PROMISE VERSUS PERFORMANCE FOR OUR COMPANY Our Company is an Unlisted Issuer in terms of the SEBI (ICDR) Regulations, and this Issue is an Initial Public Offering in terms of the SEBI (ICDR) Regulations. Therefore, data regarding promise versus performance is not applicable to us. OUTSTANDING DEBENTURES, BONDS, REDEEMABLE PREFERENCE SHARES AND OTHER INSTRUMENTS ISSUED BY OUR COMPANY As on the date of this Draft Prospectus, our Company has no outstanding debentures, bonds or redeemable preference shares. STOCK MARKET DATA FOR EQUITY SHARES Our Company is an Unlisted Issuer in terms of the SEBI (ICDR) Regulations, and this Issue is an Initial Public Offering in terms of the SEBI (ICDR) Regulations. Thus there is no stock market data available for the Equity Shares of our Company. MECHANISM FOR REDRESSAL OF INVESTOR GRIEVANCES The Agreement between the Registrar and Our Company provides for retention of records with the Registrar for a period of at least three year from the last date of dispatch of the letters of allotment, demat credit and refund orders to enable the investors to approach the Registrar to this Issue for redressal of their grievances. All grievances relating to this Issue may be addressed to the Registrar with a copy to the Compliance Officer, giving full details such as the name, address of the applicant, number of Equity Shares applied for, amount paid on application and the bank branch or collection centre where the application was submitted. All grievances relating to the ASBA process may be addressed to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and the Designated Branch or the collection centre of the SCSB where the Application Form was submitted by the ASBA applicants. DISPOSAL OF INVESTOR GRIEVANCES BY OUR COMPANY Our Company or the Registrar to the Issue or the SCSB in case of ASBA Applicant shall redress routine investor grievances within 15 working days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, our Company will seek to redress these complaints as expeditiously as possible. Page 257 of 370

259 We have constituted the Stakeholders Relationship Committee of the Board vide resolution passed at the Board Meeting held on March 25, 2015 For further details, please refer to the chapter titled Our Management beginning on page 143 of this Draft Prospectus. Our Company has appointed Mr. Pratim Ramani on March 25, 2015 as Company Secretary & Compliance Officer and he may be contacted at the following address: Zeal Aqua Limited At Olpad, GIDC, Pl No. 4 and 5 Ta Olpad, Surat , Gujarat, India. Tel: Fax: cs@zealaqua.com Website: Registration Number: Investors can contact the Compliance Officer or the Registrar in case of any pre-issue or post-issue related problems such as non-receipt of letters of allocation, credit of allotted Equity Shares in the respective beneficiary account or refund orders, etc. CHANGES IN AUDITORS DURING THE LAST THREE FINANCIAL YEARS Following Changes in Auditors have been done in last three financial years M/s. Pary & Co. Chartered Accountant was appointed as auditors in place of M/s Modh & Co. Chartered Accountants with effect from September 30, CAPITALISATION OF RESERVES OR PROFITS Save and except as stated in the chapter titled Capital Structure beginning on page 56 of this Draft Prospectus, our Company has not capitalized its reserves or profits during the last five years. REVALUATION OF ASSETS Our Company has not revalued its assets since incorporation. PURCHASE OF PROPERTY Other than as disclosed in this Draft Prospectus, there is no property which has been purchased or acquired or is proposed to be purchased or acquired which is to be paid for wholly or partly from the proceeds of the present Issue or the purchase or acquisition of which has not been completed on the date of this Draft Prospectus. Except as stated elsewhere in this Draft Prospectus, our Company has not purchased any property in which the Promoters and/or Directors have any direct or indirect interest in any payment made there under. SERVICING BEHAVIOR There has been no default in payment of statutory dues or of interest or principal in respect of our borrowings or deposits. Page 258 of 370

260 SECTION VII ISSUE INFORMATION TERMS OF THE ISSUE The Equity Shares being issued and transferred are subject to the provisions of the Companies Act, 2013, SEBI ICDR Regulations, our Memorandum and Articles of Association, the SME Equity Listing Agreements, the terms of the Draft Prospectus, the Prospectus, Application Form, ASBA Application Form, the Revision Form, the Confirmation of Allocati on Note and other terms and conditions as may be incorporated in the allotment advices and other documents/certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws as applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, the Government of India, the Stock Exchange, the RBI, RoC and/or other authorities, as in force on the date of the Issue and to the extent applicable. Please note that, in terms of SEBI circular CIR/CFD/DIL/1/ 2011 dated April 29, 2011, QIB applicants, Non- Institutional applicants and other Applicants whose Application amount exceeds Rs. 2 lakhs can participate in the Issue only through the ASBA process. The Retail Individual Applicants can participate in the Issue either through the ASBA process or the non ASBA process. ASBA Applicants should note that the ASBA process involves Application procedures that may be different from the procedure applicable to non ASBA process. RANKING OF EQUITY SHARES The Equity Shares being issued or transferred in the Issue shall be subject to the provisions of the Companies Act, 2013 and the Memorandum and Articles of Association and shall rank pari-passu with the existing Equity Shares of our Company including rights in respect of dividend. The Allottees in receipt of Allotment of Equity Shares under this Issue will be entitled to dividends and other corporate benefits, if any, declared by our Company after the date of Allotment in accordance with Companies Act, 1956 and Companies Act, 2013 and the Articles. For further details, please refer to the section titled Main Provisions of Articles of Association beginning on page number 316 of this Draft Prospectus. MODE OF PAYMENT OF DIVIDEND The declaration and payment of dividend will be as per the provisions of Companies Act and recommended by the Board of Directors at their discretion and approved by the shareholders and will depend on a number of factors, including but not limited to earnings, capital requirements and overall financial condition of our Company. We shall pay dividend, if declared, to our Shareholders as per the provisions of the Companies Act and our Articles of Association. For further details, please refer to the chapter titled Dividend Policy beginning on page 172 of this Draft Prospectus. FACE VALUE AND ISSUE PRICE PER SHARE The face value of the Equity Shares is Rs. 10 each and the Issue Price is Rs. 122 per Equity Share. The Issue Price is determined by our Company in consultation with the Lead Manager and is justified under the section titled Basis for Issue Price beginning on page 82 of the Draft Prospectus. At any given point of time there shall be only one denomination for the Equity Shares. Page 259 of 370

261 COMPLIANCE WITH SEBI ICDR REGULATIONS Our Company shall comply with all requirements of the SEBI ICDR Regulations. Our Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time. RIGHTS OF THE EQUITY SHAREHOLDERS Subject to applicable laws, rules, regulations and guidelines and the Articles of Association, the Equity shareholders shall have the following rights: Right to receive dividend, if declared; Right to receive Annual Reports & notices to members; Right to attend general meetings and exercise voting rights, unless prohibited by law; Right to vote on a poll either in person or by proxy; Right to receive offer for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation subject to any statutory and preferential claim being satisfied; Right of free transferability subject to applicable law, including any RBI rules and regulations; and Such other rights, as may be available to a shareholder of a listed public limited company under the Companies Act, 2013 Act, the terms of the SME Listing Agreement with the Stock Exchange and the Memorandum and Articles of Association of our Company. For a detailed description of the main provisions of the Articles of Association relating to voting rights, dividend, forfeiture and lien and/or consolidation/splitting, please refer to the section titled Main Provisions of Articles of Association beginning on page number 316 of this Draft Prospectus. MINIMUM APPLICATION VALUE, MARKET LOT AND TRADING LOT In terms of Section 29 of the Companies Act, 2013, the Equity Shares shall be allotted only in dematerialised form. As per the existing SEBI ICDR Regulations, the trading of the Equity Shares shall only be in dematerialised form for all investors. The trading of the Equity Shares will happen in the minimum contract size of 1000 Equity Shares and the same may be modified by BSE from time to time by giving prior notice to investors at large. Allocation and allotment of Equity Shares through this Offer will be done in multiples of 1,000 Equity Share subject to a minimum allotment of 1,000 Equity Shares to the successful applicants in terms of the SEBI circular no. CIR/MRD/DSA/06/2012 dated February 21, Allocation and allotment of Equity Shares through this Offer will be done in multiples of 1,000 Equity Share subject to a minimum allotment of 1,000 Equity Shares to the successful applicants. Page 260 of 370

262 MINIMUM NUMBER OF ALLOTTEES The minimum number of allottees in this Issue shall be 50 shareholders. In case the minimum number of prospective allottees is less than 50, no allotment will be made pursuant to this Issue and the monies collected shall be refunded within 12 days of closure of issue. JURISDICTION Exclusive jurisdiction for the purpose of this Issue is with the competent courts / authorities in Ahmedabad, Gujarat, India. The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and applications may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. JOINT HOLDER Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint tenants with benefits of survivorship. NOMINATION FACILITY TO INVESTOR In accordance with Section 72 of the Companies Act, 2013 the sole applicant, or the first applicant along with other joint applicant, may nominate any one person in whom, in the event of the death of sole applicant or in case of joint applicant, death of all the Applicant, as the case may be, the Equity Shares Allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to equity share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at our Corporate Office or to the registrar and transfer agents of our Company. Any person who becomes a nominee by virtue of the provisions of Section 72 of the Companies Act, 2013 shall upon the production of such evidence as may be required by the Board, elect either: a. to register himself or herself as the holder of the Equity Shares; or b. to make such transfer of the Equity Shares, as the deceased holder could have made. Page 261 of 370

263 Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Since the Allotment of Equity Shares in the Issue will be made only in dematerialized mode there is no need to make a separate nomination with our Company. Nominations registered with respective depository participant of the applicant would prevail. If the investor wants to change the nomination, they are requested to inform their respective depository participant. PERIOD OF OPERATION OF SUBSCRIPTION LIST OF PUBLIC ISSUE ISSUE OPENS ON ISSUE CLOSES ON [ ] [ ] MINIMUM SUBSCRIPTION This Issue is not restricted to any minimum subscription level. This Issue is 100% underwritten. As per Section 39 of the Companies Act, 2013, if the stated minimum amount has not be subscribed and the sum payable on application is not received within a period of 30 days from the date of the Prospectus, the application money has to be returned within such period as may be prescribed. If our Company does not receive the 100% subscription of the offer through the Offer Document including devolvement of Underwriters, if any, within sixty (60) days from the date of closure of the issue, our Company shall forthwith refund the entire subscription amount received. If there is a delay beyond eight days after our Company becomes liable to pay the amount, our Company and every officer in default will, on and from the expiry of this period, be jointly and severally liable to repay the money, with interest or other penalty as prescribed under the SEBI Regulations, the Companies Act 2013 and applicable law. The minimum number of allottees in this Issue shall be 50 shareholders. In case the minimum number of prospective allottees is less than 50, no allotment will be made pursuant to this Issue and the monies collected shall be refunded within 12 days of closure of issue. Further, in accordance with Regulation 106(R) of the SEBI (ICDR) Regulations, our Company shall ensure that the minimum application size in terms of number of specified securities shall not be less than Rs.1,00,000/- (Rupees One Lakh) per application. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and applications may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Page 262 of 370

264 MIGRATION TO MAIN BOARD Our company may migrate to the Main Board of BSE from the SME Stock Exchange on a later date subject to the following: a. If the Paid up Capital of our Company is likely to increase above Rs. 2,500 lakhs by virtue of any further issue of capital by way of rights issue, preferential issue, bonus issue etc. (which has been approved by a special resolution through postal ballot wherein the votes cast by the shareholders other than the Promoters in favour of the proposal amount to at least two times the number of votes cast by shareholders other than promoter shareholders against the proposal and for which the company has obtained in-principal approval from the Main Board), our Company shall apply to BSE for listing of its shares on its Main Board subject to the fulfilment of the eligibility criteria for listing of specified securities laid down by the Main Board. OR b. If the Paid up Capital of our company is more than Rs. 1,000 lakhs but below Rs. 2,500 lakhs, our Company may still apply for migration to the Main Board if the same has been approved by a special resolution through postal ballot wherein the votes cast by the shareholders other than the Promoters in favour of the proposal amount to at least two times the number of votes cast by shareholders other than promoter shareholders against the proposal. MARKET MAKING The shares offered though this Issue are proposed to be listed on the SME Platform of BSE (SME Exchange) with compulsory market making through the registered Market Maker of the SME Exchange for a minimum period of three years or such other time as may be prescribed by the Stock Exchange, from the date of listing of shares offered through the Prospectus. For further details of the market making arrangement please refer to chapter titled General Information beginning on page 49 of this Draft Prospectus. ARRANGEMENT FOR DISPOSAL OF ODD LOT The trading of the equity shares will happen in the minimum contract size of 1,000 shares in terms of the SEBI circular no. CIR/MRD/DSA/06/2012 dated February 21, However, the market maker shall buy the entire shareholding of a shareholder in one lot, where value of such shareholding is less than the minimum contract size allowed for trading on the SME Platform of BSE. AS PER THE EXTANT POLICY OF THE GOVERNMENT OF INDIA, OCBS CANNOT PARTICIPATE IN THIS ISSUE. The current provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, provides a general permission for the NRIs, FIIs and foreign venture capital investors registered with SEBI to invest in shares of Indian companies by way of subscription in an IPO. However, such investments would be subject to other investment restrictions under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, RBI and/or SEBI regulations as may be applicable to such investors. The Allotment of the Equity Shares to Non-Residents shall be subject to the conditions, if any, as may be prescribed by the Government of India/RBI while granting such approvals. Page 263 of 370

265 OPTION TO RECEIVE SECURITIES IN DEMATERIALISED FORM In accordance with the SEBI ICDR Regulations, Allotment of Equity Shares to successful applicants will only be in the dematerialized form. Applicants will not have the option of Allotment of the Equity Shares in physical form. The Equity Shares on Allotment will be traded only on the dematerialized segment of the Stock Exchange. Allottees shall have the option to re-materialise the Equity Shares, if they so desire, as per the provisions of the Companies Act and the Depositories Act. NEW FINANCIAL INSTRUMENTS The Issuer Company is not issuing any new financial instruments through this Issue. APPLICATION BY ELIGIBLE NRIs, FPI S REGISTERED WITH SEBI, VCF S, AIF S REGISTERED WITH SEBI AND QFI S It is to be understood that there is no reservation for Eligible NRIs or FPIs or QFIs or VCFs or AIFs registered with SEBI. Such Eligible NRIs, QFIs, FPIs, VCFs or AIFs registered with SEBI will be treated on the same basis with other categories for the purpose of Allocation. RESTRICTIONS, IF ANY ON TRANSFER AND TRANSMISSION OF EQUITY SHARES Except for lock-in of the pre-issue Equity Shares and Promoters minimum contribution in the Issue as detailed in the chapter Capital Structure beginning on page number 56 of this Draft Prospectus, and except as provided in the Articles of Association, there are no restrictions on transfers of Equity Shares. There are no restrictions on transmission of shares and on their consolidation / splitting except as provided in the Articles of Association. For details please refer to the section titled Main Provisions of the Articles of Association beginning on page number 316 of this Draft Prospectus. The above information is given for the benefit of the Applicants. The Applicants are advised to make their own enquiries about the limits applicable to them. Our Company and the Lead Manager do not accept any responsibility for the completeness and accuracy of the information stated hereinabove. Our Company and the Lead Manager are not liable to inform the investors of any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of the Prospectus. Applicants are advised to make their independent investigations and ensure that the number of Equity Shares Applied for do not exceed the applicable limits under laws or regulations.. Page 264 of 370

266 ISSUE STRUCTURE This Issue is being made in terms of Regulation 106(M)(1) of Chapter XB of SEBI (ICDR) Regulations, 2009, as amended from time to time, whereby, an issuer, whose post issue face value capital does not exceed ten crore rupees, shall issue specified securities to the public and propose to list the same on the Small and Medium Enterprise Exchange ("SME Exchange", in this case being the SME Platform of BSE). For further details regarding the salient features and terms of such an issue please refer chapter titled Terms of the Issue and Issue Procedure beginning on page 259 and 268 of this Draft Prospectus. Following is the issue structure: Public Issue of 11,35,000 Equity Shares of face value of Rs. 10/- each fully paid (the Equity Shares ) for cash at a price of Rs. 122 per Equity Share (including a premium of Rs. 112 per Equity Share) aggregating Rs. 1, Lakhs ( the Issue ) by our Company. The Issue comprises a Net Issue to Public of 10,75,000 Equity Shares ( the Net Issue ), a reservation of 60,000 Equity Shares for subscription by the designated Market Maker ( the Market Maker Reservation Portion ) Particulars Net Issue to Public* Market Maker Reservation Portion Number of Equity Shares 10,75,000 Equity Shares 60,000 Equity Shares Percentage of Issue Size available for allocation Basis of Allotment/Allocation if respective category is oversubscribed Mode of Application Minimum Application 94.71% of the Issue Size % of the Post Issue Paid up Capital Proportionate subject to minimum allotment of 1,000 Equity Shares and Further allotment in multiples of 1,000 Equity Shares each. For further details please refer to the section titled Issue Procedure Basis of Allotment beginning on page 304 of the Draft Prospectus. For QIB and NII Applicants The application must be made compulsorily through the ASBA Process. For Retail Individuals Applicants May apply through the ASBA or the Physical Form. For QIB and NII: Such number of Equity Shares in multiples of 1,000 Equity Shares such that the Application Value exceeds Rs. 2,00, % of the Issue size 1.43% of the Post Issue Paid up Capital Firm allotment Through ASBA Process Only 60,000 Equity Shares For Retail Individuals: 1,000 Equity Shares Maximum Application For Other than Retail Individual 60,000 Equity Shares of Page 265 of 370

267 Size Particulars Net Issue to Public* Investors: For all other investors the maximum application size is the Net Issue to public subject to limits the investor has to adhere under the relevant laws and regulations as applicable. Market Maker Reservation Portion Face Value Rs For Retail Individuals: 1,000 Equity Shares Mode of Allotment Compulsorily in dematerialized mode. Compulsorily in dematerialized mode. Trading Lot 1,000 Equity Shares 1,000 Equity Shares, however the Market Maker may accept odd lots if any in the market as required under the SEBI ICDR Regulations Terms of payment The entire Application Amount will be payable at the time of submission of the Application Form. Note:-50 % of the shares offered in the Net Issue to Public portion are reserved for applications whose value is below Rs. 2,00,000 and the balance 50 % of the shares are reserved for applications whose value is above Rs. 2,00,000. WITHDRAWAL OF THE ISSUE In accordance with the SEBI ICDR Regulations, our Company, in consultation with Lead Manager, reserves the right not to proceed with this Issue at any time after the Issue Opening Date, but before our Board meeting for Allotment, without assigning reasons thereof. However, if our Company withdraws the Issue after the Issue Closing Date, we will give reason thereof within two days by way of a public notice which shall be published in the same newspapers where the pre-issue advertisements were published. Further, the Stock Exchange shall be informed promptly in this regard and the Lead Manager, through the Registrar to the Issue, shall notify the SCSBs to unblock the Bank Accounts of the ASBA Applicants within one Working Day from the date of receipt of such notification. In case our Company withdraws the Issue after the Issue Closing Date and subsequently decides to undertake a public offering of Equity Shares, our Company will file a fresh offer document with the stock exchange where the Equity Shares may be proposed to be listed. Notwithstanding the foregoing, the Issue is also subject to obtaining the final listing and trading approvals of the Stock Exchange, which the Company shall apply for after Allotment. In terms of the SEBI Regulations, Non retail applicants shall not be allowed to withdraw their Application after the Issue Closing Date. Page 266 of 370

268 ISSUE PROGRAMME ISSUE OPENS ON ISSUE CLOSES ON Applications and any revisions to the same will be accepted only between a.m. and 5.00 p.m. (Indian Standard Time) during the Issue Period at the Application Centres mentioned in the Application Form, or in the case of ASBA Applicants, at the Designated Bank Branches except that on the Issue Closing Date applications will be accepted only between a.m. and 3.00 p.m. (Indian Standard Time). Applications will be accepted only on Working Days, i.e., Monday to Friday (excluding any public holiday). [ ] [ ] Page 267 of 370

269 ISSUE PROCEDURE All Applicants should review the General Information Document for Investing in Public Issues prepared and issued in accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI (the General Information Document ) included below under section - Part B General Information Document, which highlights the key rules, processes and procedures applicable to public issues in general in accordance with the provisions of the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956, the Securities Contracts (Regulation) Rules, 1957 and the SEBI Regulations. The General Information Document has been updated to include reference to the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 and certain notified provisions of the Companies Act, 2013, to the extent applicable to a public issue. The General Information Document is also available on the websites of the Stock Exchange and the Lead Manager. Please refer to the relevant provisions of the General Information Document which are applicable to the Issue. Please note that the information stated/covered in this section may not be complete and/or accurate and as such would be subject to modification/change. Our Company and the Lead Manager do not accept any responsibility for the completeness and accuracy of the information stated in this section and the General Information Document. Our Company and the Lead Manager would not be liable for any amendment, modification or change in applicable law, which may occur after the date of this Draft Prospectus. Applicants are advised to make their independent investigations and ensure that their Applications do not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or as specified in this Draft Prospectus and Prospectus. This section applies to all the Applicants, please note that all the Applicants are required to make payment of the full Application Amount along with the Application Form. FIXED PRICE ISSUE PROCEDURE The Issue is being made under Regulation 106(M)(1) of Chapter XB of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 via Fixed Price Process. Applicants are required to submit their Applications to the Selected Branches / Offices of the Escrow Bankers to the Issue who shall duly submit to the Registrar of the Issue. In case of QIB Applicants, the Company in consultation with the Lead Manager may reject Applications at the time of acceptance of Application Form provided that the reasons for such rejection shall be provided to such Applicant in writing. In case of Non Institutional Applicants and Retail Individual Applicants, our Company would have a right to reject the Applications only on technical grounds. Investors should note that the Equity Shares will be allotted to all successful Applicants only in dematerialized form. Applicants will not have the option of being Allotted Equity Shares in physical form. The Equity Shares on Allotment shall be traded only in the dematerialized segment of the Stock Exchange. APPLICATION FORM Pursuant to SEBI Circular dated September 27, 2011 and bearing No. CIR/CFD/DIL/4/2011, the Application Form has been standardized i.e., there will be a single Application Form for ASBA and non-asba Applicants. The prescribed colours of the Application Form for various investors applying in the Issue are as follows: Page 268 of 370

270 Category Resident Indians and Eligible NRIs applying on a nonrepatriation basis (ASBA and Non-ASBA) Non-Residents and Eligible NRIs applying on a repatriation basis (ASBA and Non-ASBA) Colour of Application Form White In accordance with the SEBI (ICDR) Regulations, 2009 in public issues w.e.f. May 1, 2010 all the investors can apply through ASBA process and w.e.f May 02, 2011, the Non-Institutional applicants and the QIB Applicants have to compulsorily apply through the ASBA Process. Blue WHO CAN APPLY? In addition to the category of Applicants set forth under General Information Document for Investing in Public Issues Category of Investors Eligible to participate in an Issue, the following persons are also eligible to invest in the Equity Shares under all applicable laws, regulations and guidelines, including: FPIs and sub-accounts registered with SEBI other than Category III foreign portfolio investor; Category III foreign portfolio investors, which are foreign corporates or foreign individuals only under the Non Institutional Investors (NIIs) category; Scientific and/or industrial research organisations authorised in India to invest in the Equity Shares. OPTION TO SUBSCRIBE IN THE ISSUE a. As per Section 29(1) of the Companies Act, 2013 allotment of Equity Shares shall be in dematerialised form only. b. The Equity Shares, on allotment, shall be traded on the Stock Exchange in demat segment only. c. A single application from any investor shall not exceed the investment limit/minimum number of specified securities that can be held by him/her/it under the relevant regulations/statutory guidelines and applicable law. PARTICIPATION BY ASSOCIATES/ AFFILIATES OF LEAD MANAGER AND SYNDICATE MEMBERS The Lead Manager and the Syndicate Members, if any, shall not be allowed to purchase in this Issue in any manner, except towards fulfilling their underwriting obligations. However, the associates and affiliates of the Lead Manager and the Syndicate Members, if any, may purchase the Equity Shares in the Issue, either in the QIB Category or in the Non-Institutional Category as may be applicable to such Applicants, where the allocation is on a proportionate basis and such subscription may be on their own account or on behalf of their clients. Page 269 of 370

271 APPLICATION BY INDIAN PUBLIC INCLUDING ELIGIBLE NRI S APPLYING ON NON REPATRIATION Application must be made only in the names of individuals, limited companies or statutory corporations/institutions and not in the names of minors, foreign nationals, non residents (except for those applying on non repatriation), trusts, (unless the trust is registered under the Societies Registration Act, 1860 or any other applicable trust laws and is authorized under its constitution to hold shares and debentures in a company), Hindu undivided families, partnership firms or their nominees. In case of HUFs, application shall be made by the Karta of the HUF. An applicant in the Net Public Category cannot make an application for that number of Equity Shares exceeding the number of Equity Shares offered to the public. Eligible NRIs applying on a non-repatriation basis may make payments by inward remittance in foreign exchange through normal banking channels or by debits to NRE/FCNR accounts as well as NRO accounts. APPLICATIONS BY ELIGIBLE NRI S/RFPI s ON REPATRIATION BASIS Application Forms have been made available for eligible NRIs at our Corporate Office and at the Office of the Lead manager. Eligible NRI Applicants may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for Allotment under the reserved category. The eligible NRIs who intend to make payment through Non Resident Ordinary (NRO) accounts shall use the Forms meant for Resident Indians and should not use the forms meant for the reserved category. Under FEMA, general permission is granted to companies vide notification no. FEMA/20/2000 RB dated 03/05/2000 to issue securities to NRIs subject to the terms and conditions stipulated therein. Companies are required to file the declaration in the prescribed form to the concerned Regional Office of RBI within 30 days from the date of issue of shares for allotment to NRIs on repatriation basis. Allotment of equity shares to Non Resident Indians shall be subject to the prevailing Reserve Bank of India Guidelines. Sale proceeds of such investments in equity shares will be allowed to be repatriated along with the income thereon subject to permission of the RBI and subject to the Indian tax laws and regulations and any other applicable laws. As per the current regulations, the following restrictions are applicable for investments by FPIs: 1. A foreign portfolio investor shall invest only in the following securities, namely- (a) Securities in the primary and secondary markets including shares, debentures and warrants of companies, listed or to be listed on a recognized stock exchange in India; (b) Units of schemes floated by domestic mutual funds, whether listed on a recognized stock exchange or not; (c) Units of schemes floated by a collective investment scheme; (d) Derivatives traded on a recognized stock exchange; (e) Treasury bills and dated government securities; (f) Commercial papers issued by an Indian company; (g) Rupee denominated credit enhanced bonds; (h) Security receipts issued by asset reconstruction companies; (i) Perpetual debt instruments and debt capital instruments, as specified by the Reserve Bank of India from time to time; (j) Listed and unlisted non-convertible debentures/bonds issued by an Indian company in the infrastructure sector, where infrastructure is defined in terms of the extant External Commercial Borrowings (ECB) guidelines; (k) Nonconvertible debentures or bonds issued by Non-Banking Financial Companies categorized as Infrastructure Finance Companies (IFCs) by the Reserve Bank of India; (l) Rupee denominated bonds or units issued by infrastructure debt funds; (m) Indian depository receipts; and (n) Such other instruments specified by the Board from time to time. 2. Where a foreign institutional investor or a sub account, prior to commencement of these regulations, holds equity shares in a company whose shares are not listed on any recognized stock Page 270 of 370

272 exchange, and continues to hold such shares after initial public offering and listing thereof, such shares shall be subject to lock-in for the same period, if any, as is applicable to shares held by a foreign direct investor placed in similar position, under the policy of the Government of India relating to foreign direct investment for the time being in force. 3. In respect of investments in the secondary market, the following additional conditions shall apply: a) A foreign portfolio investor shall transact in the securities in India only on the basis of taking and giving delivery of securities purchased or sold; b) Nothing contained in clause (a) shall apply to: i. Any transactions in derivatives on a recognized stock exchange; ii. Short selling transactions in accordance with the framework specified by the Board; iii. Any transaction in securities pursuant to an agreement entered into with the merchant banker in the process of market making or subscribing to unsubscribed portion of the issue in accordance with Chapter XB of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; iv. Any other transaction specified by the Board. c) No transaction on the stock exchange shall be carried forward; d) The transaction of business in securities by a foreign portfolio investor shall be only through stock brokers registered by the Board; provided nothing contained in this clause shall apply to: i. transactions in Government securities and such other securities falling under the purview of the Reserve Bank of India which shall be carried out in the manner specified by the Reserve Bank of India; ii. iii. iv. sale of securities in response to a letter of offer sent by an acquirer in accordance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; sale of securities in response to an offer made by any promoter or acquirer in accordance with the Securities and Exchange Board of India (Delisting of Equity shares) Regulations, 2009; Sale of securities, in accordance with the Securities and Exchange Board of India (Buy-back of securities) Regulations, 1998; v. divestment of securities in response to an offer by Indian Companies in accordance with Operative Guidelines for Disinvestment of Shares by Indian Companies in the overseas market through issue of American Depository Receipts or Global Depository Receipts as notified by the Government of India and directions issued by Reserve Bank of India from time to time; vi. vii. viii. Any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by the Central Government or any State Government; Any transaction in securities pursuant to an agreement entered into with merchant banker in the process of market making or subscribing to unsubscribed portion of the issue in accordance with Chapter XB of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; Any other transaction specified by the Board. Page 271 of 370

273 e) A foreign portfolio investor shall hold, deliver or cause to be delivered securities only in dematerialized form: Provided that any shares held in non-dematerialized form, before the commencement of these regulations, can be held in non-dematerialized form, if such shares cannot be dematerialized. Unless otherwise approved by the Board, securities shall be registered in the name of the foreign portfolio investor as a beneficial owner for the purposes of the Depositories Act, The purchase of equity shares of each company by a single foreign portfolio investor or an investor group shall be below ten percent of the total issued capital of the company. 5. The investment by the foreign portfolio investor shall also be subject to such other conditions and restrictions as may be specified by the Government of India from time to time. 6. In cases where the Government of India enters into agreements or treaties with other sovereign Governments and where such agreements or treaties specifically recognize certain entities to be distinct and separate, the Board may, during the validity of such agreements or treaties, recognize them as such, subject to conditions as may be specified by it. 7. A foreign portfolio investor may lend or borrow securities in accordance with the framework specified by the Board in this regard. No foreign portfolio investor may issue, subscribe to or otherwise deal in offshore derivative instruments, directly or indirectly, unless the following conditions are satisfied: (a) Such offshore derivative instruments are issued only to persons who are regulated by an appropriate foreign regulatory authority; (b) Such offshore derivative instruments are issued after compliance with know your client norms: Provided that those unregulated broad based funds, which are classified as Category II foreign portfolio investor by virtue of their investment manager being appropriately regulated shall not issue, subscribe or otherwise deal in offshore derivatives instruments directly or indirectly: Provided further that no Category III foreign portfolio investor shall issue, subscribe to or otherwise deal in offshore derivatives instruments directly or indirectly. A foreign portfolio investor shall ensure that further issue or transfer of any offshore derivative instruments issued by or on behalf of it is made only to persons who are regulated by an appropriate foreign regulatory authority. Foreign portfolio investors shall fully disclose to the Board any information concerning the terms of and parties to off-shore derivative instruments such as participatory notes, equity linked notes or any other such instruments, by whatever names they are called, entered into by it relating to any securities listed or proposed to be listed in any stock exchange in India, as and when and in such form as the Board may specify. Any offshore derivative instruments issued under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 before commencement of SEBI (Foreign Portfolio Investors) Regulations, 2014 shall be deemed to have been issued under the corresponding provisions of SEBI (Foreign Portfolio Investors) Regulations, Page 272 of 370

274 The purchase of equity shares of each company by a single foreign portfolio investor or an investor group shall be below 10% of the total issued capital of the company. An FII or its subaccount who holds a valid certificate of registration shall, subject to payment of conversion fees, be eligible to continue to buy, sell or otherwise deal in securities till the expiry of its registration as a foreign institutional investor or sub-account, or until he obtains a certificate of registration as foreign portfolio investor, whichever is earlier. A qualified foreign investor may continue to buy, sell or otherwise deal in securities subject to the provisions of the SEBI (Foreign Portfolio Investors) Regulations, 2014, for a period of one year from the date of commencement of the aforesaid regulations, or until it obtains a certificate of registration as foreign portfolio investor, whichever is earlier. APPLICATIONS BY MUTUAL FUNDS No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity related instruments of any single company provided that the limit of 10% shall not be applicable for investments in index funds or sector or industry specific funds. No Mutual Fund under all its schemes should own more than 10% of any company s paid-up share capital carrying voting rights. With respect to Applications by Mutual Funds, a certified copy of their SEBI registration certificate must be lodged with the Application Form. Failing this, our Company reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason thereof. In case of a mutual fund, a separate Application can be made in respect of each scheme of the mutual fund registered with SEBI and such Applications in respect of more than one scheme of the mutual fund will not be treated as multiple applications provided that the Applications clearly indicate the scheme concerned for which the Application has been made. The Applications made by the asset management companies or custodians of Mutual Funds shall specifically state the names of the concerned schemes for which the Applications are made. APPLICATIONS BY LIMITED LIABILITY PARTNERSHIPS In case of Applications made by limited liability partnerships registered under the Limited Liability Partnership Act, 2008, a certified copy of certificate of registration issued under the Limited Liability Partnership Act, 2008, must be attached to the Application Form. Failing this, our Company reserves the right to reject any Application without assigning any reason thereof. Limited liability partnerships can participate in the Issue only through the ASBA process. APPLICATIONS BY INSURANCE COMPANIES In case of Applications made by insurance companies registered with the IRDA, a certified copy of certificate of registration issued by IRDA must be attached to the Application Form. Failing this, our Company reserves the right to reject any Application without assigning any reasons thereof. The exposure norms for insurers, prescribed under the Insurance Regulatory and Development Authority (Investment) Regulations, 2000 (the IRDA Investment Regulations ), are broadly set forth below: 1. Equity shares of a company: The least of 10% of the investee company s subscribed capital (face value) or 10% of the respective fund in case of life insurer or 10% of investment assets in case of general insurer or reinsurer; Page 273 of 370

275 The entire group of the investee company: the least of 10% of the respective fund in case of a life insurer or 10% of investment assets in case of a general insurer or reinsurer (25% in case of Unit Linked Insurance Plans); and 2. The industry sector in which the investee company operates: 10% of the insurer s total investment exposure to the industry sector (25% in case of Unit Linked Insurance Plans). APPLICATIONS UNDER POWER OF ATTORNEY In case of Applications made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, FPI s, Mutual Funds, insurance companies and provident funds with minimum corpus of Rs Lakhs (subject to applicable law) and pension funds with a minimum corpus of Rs Lakhs,a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of the Memorandum of Association and Articles of Association and/ or bye laws must be lodged along with the Application Form. Failing this, the Company reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason thereof. With respect to applications by VCFs, FVCIs, and FPIs, a certified copy of the power of attorney or the relevant resolution or authority, as the case may belong with a certified copy of their SEBI registration certificate must be lodged along with the Application Form. Failing this, the Company reserves the right to accept or reject any application, in whole or in part, in either case without assigning any reasons thereof. In case of Applications made pursuant to a power of attorney by Mutual Funds, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with the certified copy of their SEBI registration certificate must be lodged along with the Application Form. Failing this, the Company reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason thereof. In case of Applications made by insurance companies registered with the Insurance Regulatory and Development Authority, a certified copy of certificate of registration issued by Insurance Regulatory and Development Authority must be lodged along with the Application Form. Failing this, the Company reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason thereof. In case of Applications made pursuant to a power of attorney by FIIs, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of their SEBI registration certificate must be lodged along with the Application Form. Failing this, the Company reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason thereof. In case of Applications made by provident funds with minimum corpus of Rs. 25 crore (subject to applicable law) and pension funds with minimum corpus of Rs. 25 crore, a certified copy of certificate from a Chartered Accountant certifying the corpus of the provident fund/ pension fund must be lodged along with the Application Form. Failing this, the Company reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason thereof. Page 274 of 370

276 APPLICATIONS BY PROVIDENT FUNDS/PENSION FUNDS In case of Applications made by provident funds with minimum corpus of Rs. 25 Crore (subject to applicable law) and pension funds with minimum corpus of Rs. 25 Crore, a certified copy of certificate from a chartered accountant certifying the corpus of the provident fund/ pension fund must be lodged along with the Application Form. Failing this, the Company reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason thereof. MAXIMUM AND MINIMUM APPLICATION SIZE In addition to what is set forth under General Information Document for Investing in Public Issues Applying in the Issue, the following terms and guidelines must be adhered to: Applicants are advised to ensure that any single Application from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in this Draft Prospectus. Information for the Applicants: a. Our Company will file the Prospectus with the RoC at least 3 (three) working days before the Issue Opening Date. b. The LMs will circulate copies of the Prospectus along with the Application Form to potential investors. c. Any investor (who is eligible to invest in our Equity Shares) who would like to obtain the Prospectus and/ or the Application Form can obtain the same from our registered office or from the corporate office of the LMs. d. Applicants who are interested in subscribing for the Equity Shares should approach the LMs or their authorized agent(s) to register their Applications. e. Applications made in the Name of Minors and/or their nominees shall not be accepted. f. Applicants are requested to mention the application form number on the reverse of the instrument to avoid misuse of instrument submitted along with the application for shares. Applicants are advised in their own interest, to indicate the name of the bank and the savings or current a/c no in the application form. In case of refund, the refund order will indicate these details after the name of the payee. The refund order will be sent directly to the payee's address. The Company in its absolute discretion, reserve the right to relax the above condition of simultaneous lodging of the power of attorney along with the Application Form, subject to such terms and conditions that the Company and the LMs may deem fit. The above information is given for the benefit of the Applicants. The Company and the LMs are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Prospectus. Applicants are advised to make their independent investigations and ensure that the number of Equity Shares applied for do not exceed the applicable limits under laws or regulations. Instructions for Completing the Application Form The Applications should be submitted on the prescribed Application Form and in BLOCK LETTERS in ENGLISH only in accordance with the instructions contained herein and in the Application Form. Applications not so made are liable to be rejected. ASBA Application Forms should bear the stamp of the SCSB's. ASBA Application Forms, which do not bear the stamp of the SCSB, will be rejected. Page 275 of 370

277 Applicants residing at places where the designated branches of the Banker to the Issue are not located may submit/mail their applications at their sole risk along with Demand payable at Mumbai. SEBI, vide Circular No. CIR/CFD/14/2012 dated October 04, 2012 has introduced an additional mechanism for investors to submit Application forms in public issues using the stock broker ( broker) network of Stock Exchanges, who may not be syndicate members in an issue with effect from January 01, The list of Broker Centre is available on the websites of BSE i.e. and NSE i.e. Applicant's Depository Account and Bank Details Please note that, providing bank account details in the space provided in the application form is mandatory and applications that do not contain such details are liable to be rejected. Applicants should note that on the basis of name of the Applicants, Depository Participant's name, Depository Participant Identification number and Beneficiary Account Number provided by them in the Application Form, the Registrar to the Issue will obtain from the Depository the demographic details including address, Applicants bank account details, MICR code and occupation (hereinafter referred to as 'Demographic Details'). These Bank Account details would be used for giving refunds to the Applicants. Hence, Applicants are advised to immediately update their Bank Account details as appearing on the records of the depository participant. Please note that failure to do so could result in delays in dispatch/ credit of refunds to Applicants at the Applicants sole risk and neither the LMs or the Registrar or the Escrow Collection Banks or the SCSB nor the Company shall have any responsibility and undertake any liability for the same. Hence, Applicants should carefully fill in their Depository Account details in the Application Form. These Demographic Details would be used for all correspondence with the Applicants including mailing of the CANs / Allocation Advice and printing of Bank particulars on the refund orders or for refunds through electronic transfer of funds, as applicable. The Demographic Details given by Applicants in the Application Form would not be used for any other purpose by the Registrar to the Issue. By signing the Application Form, the Applicant would be deemed to have authorized the depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. PAYMENT INSTRUCTIONS In terms of RBI circular no. DPSS.CO.CHD.No./133/ / dated July 16, 2013; non- CTS cheques are processed in three CTS centres in separate clearing session. This separate clearing session will operate thrice a week up to April 30, 2014, thereafter twice a week up to October 31, 2014 and once a week from November 1, 2014 onwards. In order to enable listing and trading of Equity Shares within 12 Working Days of the Issue Closing Date, investors are advised to use CTS cheques or use the ASBA facility to make payment. Investors are cautioned that Application Forms accompanied by non-cts cheques are liable to be rejected due to any delay in clearing beyond six Working Days from the Issue Closing Date. Page 276 of 370

278 PRE- ISSUE ADVERTISEMENT Subject to Section 30 of the Companies Act, 2013, our Company shall, after registering the Prospectus with the RoC, publish a pre-issue advertisement, in the form prescribed by the SEBI Regulations, in: (i) English National Newspaper; (ii) Hindi National Newspaper; and (iii) Regional Newspaper, each with wide circulation. TERMS OF PAYMENT/PAYMENT INSTRUCTIONS Terms of Payment / Payment Instructions 1. The entire Issue price of Rs per share is payable on application. In case of allotment of lesser number of Equity Shares than the number applied, The Company shall refund the excess amount paid on Application to the Applicants. 2. Payments should be made by cheque, or demand drawn on any Bank (including a Co-operative Bank), which is situated at, and is a member of or sub member of the bankers' clearing house located at the centre where the Application Form is submitted. Outstation cheques/ bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. PAYMENT INTO ESCROW ACCOUNT 1. The payment instruments for payment into the Escrow Account(s) should be drawn in favour of: a. In case of Resident Retail Applicants: Zeal Aqua Limited - R b. In case of Non Resident Retail Applicants: Zeal Aqua Limited - NR Cash/ Stock Invest/ Money Orders/ Postal orders will not be accepted. A separate Cheque or Bank should accompany each application form. Applicants should write the Share Application Number on the back of the Cheque /. Outstation Cheques will not be accepted and applications accompanied by such cheques drawn on outstation banks are liable for rejection. Each Applicant shall draw a cheque or demand draft for the amount payable on the Application and/ or on allocation/ Allotment as per the following terms: 1. In case of Application by NRIs applying on repatriation basis, the payments must be made through Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non Resident (FCNR) Accounts, maintained with banks authorized to deal in foreign exchange in India, along with documentary evidence in support of the remittance. Payment will not be accepted out of Non- Resident Ordinary (NRO) Account of Non-Resident Applicant applying on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to NRE Account or FCNR Account. 2. Where an Applicant has been allocated a lesser number of Equity Shares than the Applicant has applied for, the excess amount, if any, paid on Application, after adjustment towards the balance amount payable by the Pay in Date on the Equity Shares allocated will be refunded to the Applicant from the Refund Account. Page 277 of 370

279 3. On the Designated Date and no later than 12 Working days from the Issue Closing Date, the Escrow Collection Bank shall also refund all amounts payable to unsuccessful Applicants and also the excess amount paid on Application, if any, after adjusting for allocation / Allotment to the Applicants. Payment by Stock invest In terms of the Reserve Bank of India Circular No. DBOD No. FSC BC 42/ / dated November 5, 2003; the option to use the stock invest instrument in lieu of cheques or bank drafts for payment of Application money has been withdrawn. Hence, payment through stock invest would not be accepted in this Issue. ELECTRONIC REGISTRATION OF APPLICATIONS 1. The Broker / Sub Broker and SCSBs will register the Applications using the on-line facilities of the Stock Exchanges. There will be at least one on-line connectivity facility in each city, where a stock exchange is located in India and where Applications are being accepted. The Lead Manager, our Company and the Registrar are not responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Applications accepted by the Brokers and the SCSBs, (ii) the Applications uploaded by the Brokers and the SCSBs, (iii) the Applications accepted but not uploaded by the Brokers and the SCSBs or (iv) with respect to ASBA Applications, Applications accepted and uploaded without blocking funds in the ASBA Accounts. 2. The SCSBs shall be responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Applications accepted by the SCSBs, (ii) the Applications uploaded by the SCSBs, (iii) the Applications accepted but not uploaded by the SCSBs and (iv) with respect to Applications by ASBA Applicants, Applications accepted and uploaded without blocking funds in the ASBA Accounts. It shall be presumed that for Applications uploaded by the SCSBs, the full Application Amount has been blocked in the relevant ASBA Account. 3. In case of apparent data entry error either by the Broker / Sub Broker or the collecting bank in entering the Application Form number in their respective schedules other things remaining unchanged, the Application Form may be considered as valid and such exceptions may be recorded in minutes of the meeting submitted to Stock Exchange(s). 4. The Brokers / Sub Brokers and SCSBs will undertake modification of selected fields in the Application details already uploaded within one Working Day from the Issue Closing Date. 5. The Stock Exchanges will offer an electronic facility for registering Applications for the Issue. This facility will be available with the Brokers and the SCSBs during the Issue Period. The Brokers / Sub Brokers and the Designated Branches can also set up facilities for off-line electronic registration of Applications subject to the condition that they will subsequently upload the off-line data file into the online facilities for Book Building on a regular basis. On the Issue Closing Date, the Brokers and the Designated Branches shall upload the Applications till such time as may be permitted by the Stock Exchanges. This information will be available with the Brokers / Sub Brokers on a regular basis. Applicants are cautioned that a high inflow of high volumes on the last day of the Issue Period may lead to some Applications received on the last day not being uploaded and such Applications will not be considered for allocation. Page 278 of 370

280 6. At the time of registering each Application and each ASBA Application submitted by an ASBA Applicant, the Brokers and the Designated Branches shall enter the following details of the investor in the on-line system, as applicable: Name of the Applicant; IPO Name; Application Form number; Investor Category; PAN (of First Applicant, if more than one Applicant); DP ID of the demat account of the Applicant; Client Identification Number of the demat account of the Applicant; Numbers of Equity Shares Applied for; Cheque Details in case of Applications other than ASBA Application and Bank Account details in case of ASBA Applicants; Location of the Banker to the Issue or Designated Branch, as applicable, and bank code of the SCSB branch where the ASBA Account is maintained; and Bank account number. In case of submission of the Application by an ASBA Applicant through the Electronic Mode, the ASBA Applicant shall complete the above-mentioned details and mention the bank account number, except the Electronic ASBA Application Form number which shall be system generated. 7. A system generated TRS will be given to the Applicant as a proof of the registration of the application. It is the Applicant s responsibility to obtain the TRS from the Brokers / Sub Brokers or the Designated Branches. The registration of the Application by the Brokers / Sub Brokers or the Designated Branches does not guarantee that the Equity Shares shall be allocated / allotted either by our Company. 8. Such TRS will be non-negotiable and by itself will not create any obligation of any kind. 9. In case of QIB Applicants, the Lead Manager has the right to accept the Application or reject it. However, the rejection should be made at the time of receiving the Application and only after assigning a reason for such rejection in writing. In case on Non-Institutional Applicants and Retail Individual Applicants, Applications would be rejected on the technical grounds. 10. The permission given by the Stock Exchanges to use their network and software of the Online IPO system should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by our Company and/or the Lead Manager are cleared or approved by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of our Company, our Promoter, our management or any scheme or project of our Company; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges. 11. Only Applications that are uploaded on the online IPO system of the Stock Exchanges shall be considered for allocation/allotment. The Brokers / Sub Brokers will be given up to one Page 279 of 370

281 day after the Issue Closing Date to verify the DP ID and Client ID uploaded in the online IPO system during the Issue Period, after which the Registrar will receive this data from the Stock Exchanges and will validate the electronic Application details with depository s records. In case no corresponding record is available with depositories, which matches the three parameters, namely DP ID, Beneficiary Account Number and PAN, then such Applications are liable to be rejected. GENERAL INSTRUCTIONS Do s: Check if you are eligible to apply; Read all the instructions carefully and complete the applicable Application Form; Ensure that the details about Depository Participant and Beneficiary Account are correct as Allotment of Equity Shares will be in the dematerialized form only; Each of the Applicants should mention their Permanent Account Number (PAN) allotted under the Income Tax Act, 1961; Ensure that the demographic details are updated, true and correct in all respects; Ensure that the name(s) given in the Application Form is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. Ensure that you have funds equal to the Application Amount in your bank account maintained with the SCSB before submitting the Application Form to the respective Designated Branch of the SCSB; With respect to ASBA Applications ensure that the Application Form is signed by the account holder in case the applicant is not the account holder. Ensure that you have mentioned the correct bank account number in the Application Form; Ensure that you have requested for and receive a TRS; Don ts: Do not apply for lower than the minimum Application size; Do not apply at a Price Different from the Price mentioned herein or in the Application Form Do not apply on another Application Form after you have submitted an Application to the Banker to of the Issue. Do not pay the Application Price in cash, by money order or by postal order or by stock invest; Do not send Application Forms by post; instead submit the same to the Selected Branches / Offices of the Banker to the Issue. Do not fill in the Application Form such that the Equity Shares applied for exceeds the Issue Size and/ or investment limit or maximum number of Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations; Do not submit the GIR number instead of the PAN as the Application is liable to be rejected on this ground. Page 280 of 370

282 Do not submit incorrect details of the DP ID, beneficiary account number and PAN or provide details for a beneficiary account which is suspended or for which details cannot be verified by the Registrar to the Issue Do not submit Applications on plain paper or incomplete or illegible Application Forms in a colour prescribed for another category of Applicant Do not make Applications if you are not competent to contract under the Indian Contract Act, 1872, as amended; OTHER INSTRUCTIONS Joint Applications in the case of Individuals Applications may be made in single or joint names (not more than three). In the case of joint Applications, all payments will be made out in favour of the Applicant whose name appears first in the Application Form or Revision Form. All communications will be addressed to the First Applicant and will be dispatched to his or her address as per the Demographic Details received from the Depository. Permanent Account Number or PAN Pursuant to the circular MRD/DoP/Circ 05/2007 dated April 27, 2007, SEBI has mandated Permanent Account Number ("PAN") to be the sole identification number for all participants transacting in the securities market, irrespective of the amount of the transaction w.e.f. July 2, Each of the Applicants should mention his/her PAN allotted under the IT Act. Applications without this information will be considered incomplete and are liable to be rejected. It is to be specifically noted that Applicants should not submit the GIR number instead of the PAN, as the Application is liable to be rejected on this ground. Please note that Central or State Government and the officials appointed by the courts and investors residing in the State of Sikkim are exempted from specifying their PAN subject to the Depository Participants verifying the veracity of such claims of the investors in accordance with the conditions and procedures under this section on Issue Procedure. IMPERSONATION Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of Section 38 of the Companies Act, 2013 which is reproduced below: Any person who (a) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its securities; or (b) makes or abets making of multiple applications to a company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or (c) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name, Shall be liable for action under Section 447. Page 281 of 370

283 Signing of Underwriting Agreement Vide an Underwriting agreement dated April 3, 2015 this issue is 100% Underwritten. Filing of the Prospectus with the RoC The Company will file a copy of the Prospectus with the RoC in terms of Section 26 & 32 of the Companies Act, DISPOSAL OF APPLICATIONS AND APPLICATION MONEYS AND INTEREST IN CASE OF DELAY The Company shall ensure the dispatch of Allotment advice, refund orders (except for Applicants who receive refunds through electronic transfer of funds) and give benefit to the beneficiary account with Depository Participants and submit the documents pertaining to the Allotment to the Stock Exchange within two working days of date of Allotment of Equity Shares. In case of Applicants who receive refunds through ECS, direct credit or RTGS, the refund instructions will be given to the clearing system within 12 working days from the Issue Closing Date. A suitable communication shall be sent to the Applicants receiving refunds through this mode within 15 working days of Issue Closing Date, giving details of the Bank where refunds shall be credited along with amount and expected date of electronic credit of refund. The Company shall use best efforts to ensure that all steps for completion of the necessary formalities for listing and commencement of trading at SME Platform of BSE where the Equity Shares are proposed to be listed are taken within 12 working days from the Issue Closing Date. In accordance with the Companies Act, the requirements of the Stock Exchange and the SEBI Regulations, the Company further undertakes that: 1. Allotment of Equity Shares shall be made within 12 (Twelve) working days of the Issue Closing Date; 2. Dispatch of refund orders or in a case where the refund or portion thereof is made in electronic manner, the refund instructions are given to the clearing system within 12 (Twelve) working days of the Issue Closing Date would be ensured; and 3. The Company shall pay interest at 15% p.a. for any delay beyond the 15 (Fifteen) working days from the Issue Closing Date, if Allotment is not made and refund orders are not dispatched or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner and/ or demat credits are not made to investors within the 12 (Twelve) working days prescribed above. 4. The Company will provide adequate funds required for dispatch of refund orders or Allotment Advice to the Registrar to the Issue. Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by our Company as a Refund Bank and payable at par at places where Applications are received. Bank charges, if any, for en-cashing such cheques, pay orders or demand drafts at other centres will be payable by the Applicants Page 282 of 370

284 UNDERTAKINGS BY THE COMPANY We undertake as follows: 1. That the complaints received in respect of the Issue shall be attended expeditiously and satisfactorily; 2. That all steps will be taken for the completion of the necessary formalities for listing and commencement of trading at all the stock exchanges where the Equity Shares are proposed to be listed within seven Working Days of finalization of the Basis of Allotment or twelve (12) Working Days from the Issue Closing Date, whichever is earlier; 3. That the funds required for making refunds as per the modes disclosed or dispatch of allotment advice by registered post or speed post shall be made available to the Registrar to the Issue by us; 4. That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 12 days of the Issue Closing Date, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund; 5. That our Promoters contribution in full has already been brought in; 6. That the certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within specified time; 7. That no further issue of Equity Shares shall be made till the Equity Shares offered through the Prospectus are listed or until the Application monies are refunded on account of non-listing, under-subscription etc.; and 8. That, adequate arrangements shall be made to collect all Applications Supported by Blocked Amount and to consider them similar to non-asba applications while finalizing the Basis of Allotment. UTILIZATION OF THE ISSUE PROCEEDS The Board of Directors of our Company certifies that: 1. all monies received out of the Issue shall be transferred to a separate Bank Account other than the bank account referred to in Sub-Section (3) of Section 40 of the Companies Act, 2013; 2. details of all monies utilized out of the Issue referred above shall be disclosed and continue to be disclosed till the time any part of the Issue Proceeds remains unutilised, under an appropriate separate head in the balance sheet of our Company indicating the purpose for which such monies have been utilized; 3. details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the form in which such unutilized monies have been invested; and 4. Our Company shall comply with the requirements of Clause 52 of the SME Listing Agreement in relation to the disclosure and monitoring of the utilisation of the proceeds of the Issue. Our Company shall not have recourse to the Issue Proceeds until the approval for listing and trading of the Equity Shares from all the Stock Exchanges where listing is sought has been received. The Lead Manager undertakes that the complaints or comments received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily. Page 283 of 370

285 Withdrawal of the Issue Our Company, in consultation with the LM reserves the right not to proceed with the Issue at anytime, including after the Issue Closing Date but before the Board meeting for Allotment, without assigning any reason. Notwithstanding the foregoing, the Issue is also subject to obtaining the final listing and trading approvals of the Stock Exchange, which the Company shall apply for after Allotment. In terms of the SEBI Regulations, other than retail applicants shall not be allowed to withdraw their Application after the Issue Closing Date. EQUITY SHARES IN DEMATERIALISED FORM WITH NSDL OR CDSL To enable all shareholders of the Company to have their shareholding in electronic form, the Company had signed the following tripartite agreements with the Depositories and the Registrar and Share Transfer Agent: a. Agreement dated [ ] among NSDL, the Company and the Registrar to the Issue; b. Agreement dated [ ] among CDSL, the Company and the Registrar to the Issue; The Company's shares bear ISIN No. [ ]. COMMUNICATIONS All future communications in connection with Applications made in this Issue should be addressed to the Registrar to the Issue quoting the full name of the sole or First Applicant, Application Form number, Applicants Depository Account Details, number of Equity Shares applied for, date of Application form, name and address of the Banker to the Issue where the Application was submitted and cheque or draft number and issuing bank thereof and a copy of the acknowledgement slip. Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre Issue or post Issue related problems such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary accounts, refund orders etc. Page 284 of 370

286 PART B GENERAL INFORMATION DOCUMENT FOR INVESTING IN PUBLIC ISSUES This General Information Document highlights the key rules, processes and procedures applicable to public issues in accordance with the provisions of the Companies Act, 2013 (to the extent notified and in effect), the Companies Act, 1956 (without reference to the provisions thereof that have ceased to have effect upon the notification of the Companies Act, 2013), the Securities Contracts (Regulation) Act, 1956, the Securities Contracts (Regulation) Rules, 1957 and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, Bidders/Applicants should not construe the contents of this General Information Document as legal advice and should consult their own legal counsel and other advisors in relation to the legal matters concerning the Issue. For taking an investment decision, the Bidders/Applicants should rely on their own examination of the Issuer and the Issue, and should carefully read the Draft Prospectus/Prospectus before investing in the Issue. SECTION 1: PURPOSE OF THE GENERAL INFORMATION DOCUMENT (GID) This document is applicable to the public issues undertaken inter-alia through Fixed Price Issues. The purpose of the General Information Document for Investing in Public Issues is to provide general guidance to potential Applicants in IPOs, on the processes and procedures governing IPOs, undertaken in accordance with the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ( SEBI ICDR Regulations, 2009 ) Applicants should note that investment in equity and equity related securities involves risk and Applicant should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. The specific terms relating to securities and/or for subscribing to securities in an Issue and the relevant information about the Issuer undertaking the Issue; are set out in the Prospectus filed by the Issuer with the Registrar of Companies ( RoC ). Applicants should carefully read the entire Prospectus and the Application Form and the Abridged Prospectus of the Issuer in which they are proposing to invest through the Issue. In case of any difference in interpretation or conflict and/or overlap between the disclosure included in this document and the Prospectus, the disclosures in the Prospectus shall prevail. The Prospectus of the Issuer is available on the websites of stock exchanges, on the website(s) of the LM(s) to the Issue and on the website of Securities and Exchange Board of India ( SEBI ) at For the definitions of capitalized terms and abbreviations used herein Applicants may refer to the section Glossary and Abbreviations. SECTION 2: BRIEF INTRODUCTION TO IPOs ON SME EXCHANGE 2.1 INITIAL PUBLIC OFFER (IPO) An IPO means an offer of specified securities by an unlisted Issuer to the public for subscription and may include an Offer for Sale of specified securities to the public by any existing holder of such securities in an unlisted Issuer. For undertaking an IPO, an Issuer is inter-alia required to comply with the eligibility requirements of in terms of either Regulation 26(1) or Regulation 26(2) of the SEBI ICDR Regulations, 2009, if applicable. For details of compliance with the eligibility requirements by the Issuer, Applicants may refer to the Prospectus. Page 285 of 370

287 The Issuer may also undertake IPO under of chapter XB of the SEBI (ICDR) Regulations, wherein as per, Regulation 106M (1): An issuer whose post-issue face value capital does not exceed ten crore rupees shall issue its specified securities in accordance with provisions of this Chapter. Regulation 106M (2): An issuer, whose post issue face value capital, is more than ten crore rupees and upto twenty five crore rupees, may also issue specified securities in accordance with provisions of this Chapter. The present Issue being made under Regulation 106M (1) of Chapter XB of SEBI (ICDR) Regulation. 2.2 OTHER ELIGIBILITY REQUIREMENTS In addition to the eligibility requirements specified in paragraphs 2.1, an Issuer proposing to undertake an IPO is required to comply with various other requirements as specified in the SEBI ICDR Regulations, 2009, the Companies Act, 1956 and certain notified provisions of Companies Act, 2013, to the extent applicable to a public issue.(the Companies Act ), The Securities Contracts (Regulation) Rules, 1957 (the SCRR ), industry-specific regulations, if any, and other applicable laws for the time being in force. Following are the eligibility requirements for making an SME IPO under Regulation 106M (1) of Chapter XB of SEBI (ICDR) Regulation: (a) In accordance with regulation 106(P) of the SEBI (ICDR) Regulations, Issue has to be 100% underwritten and the LM has to underwrite at least 15% of the total issue size. (b) In accordance with Regulation 106(R) of the SEBI (ICDR) Regulations, total number of proposed allottees in the Issue shall be greater than or equal to fifty, otherwise, the entire application money will be refunded forthwith. If such money is not repaid within eight days from the date the company becomes liable to repay it, than the Company and every officer in default shall, on and from expiry of eight days, be liable to repay such application money, with interest as prescribed under section 40 of the Companies Act, 2013 (c) In accordance with Regulation 106(O) the SEBI (ICDR) Regulations, Company is not required to file any Offer Document with SEBI nor has SEBI issued any observations on the Offer Document. The Lead Manager shall submit the copy of Prospectus along with a Due Diligence Certificate including additional confirmations as required to SEBI at the time of filing the Prospectus with Stock Exchange and the Registrar of Companies. (d) In accordance with Regulation 106(V) of the SEBI ICDR Regulations, the LM has to ensure compulsory market making for a minimum period of three years from the date of listing of Equity Shares offered in the Issue. For further details of the market making arrangement see chapter titled General Information beginning on page 49 of this Draft Prospectus. (e) The Issuer shall not have Net Tangible assets of at least Rs. 3 crore as per the latest audited financial results. (f) The Net worth (excluding revaluation reserves) of the Issuer shall be at least Rs. 3 crore as per the latest audited financial results. (g) The Issuer should have a track record of distributable profits in terms of section 205 of Companies Act for two out of immediately preceding three financial years or it should have net worth of at least Rs. 5 Crores. (h) The Post-issue paid up capital of the Issuer shall be at least Rs. 3 Crore. (i) The Issuer shall mandatorily facilitate trading in demat securities. (j) The Issuer should not been referred to Board for Industrial and Financial Reconstruction. Page 286 of 370

288 (k) No petition for winding up is admitted by a court of competent jurisdiction against the Issuer. (l) No material regulatory or disciplinary action should have been taken by any stock exchange or regulatory authority in the past three years against the Issuer. (m) The Company should have a website Issuer shall also comply with all the other requirements as laid down for such an Issue under Chapter X-B of SEBI (ICDR) Regulations and subsequent circulars and guidelines issued by SEBI and the Stock Exchange. As per Regulation 106(M)(3) of SEBI (ICDR) Regulations, 2009, the provisions of Regulations 6(1), 6(2), 6(3), Regulation 7, Regulation 8, Regulation 9, Regulation 10, Regulation 25, Regulation 26, Regulation 27 and Sub regulation (1) of Regulation 49 of SEBI (ICDR) Regulations, 2009 shall not apply to this Issue. Thus Company is eligible for the Issue in accordance with regulation 106M (1) and other provisions of chapter XB of the SEBI (ICDR) Regulations as the post issue face value capital does not exceed Rs. 1,000 lakhs. Company also complies with the eligibility conditions laid by the SME Platform of BSE for listing of our Equity Shares. 2.3 TYPES OF PUBLIC ISSUES FIXED PRICE ISSUES AND BOOK BUILT ISSUES In accordance with the provisions of the SEBI ICDR Regulations, 2009, an Issuer can either determine the Issue Price through the Book Building Process ( Book Built Issue ) or undertake a Fixed Price Issue ( Fixed Price Issue ). An Issuer may mention Floor Price or Price Band in the RHP (in case of a Book Built Issue) and a Price or Price Band in the Draft Prospectus (in case of a fixed price Issue) and determine the price at a later date before registering the Prospectus with the Registrar of Companies. The cap on the Price Band should be less than or equal to 120% of the Floor Price. The Issuer shall announce the Price or the Floor Price or the Price Band through advertisement in all newspapers in which the pre-issue advertisement was given at least five Working Days before the Issue Opening Date, in case of an IPO and at least one Working Day before the Issue Opening Date, in case of an FPO. The Floor Price or the Issue price cannot be lesser than the face value of the securities. Applicants should refer to the Prospectus or Issue advertisements to check whether the Issue is a Book Built Issue or a Fixed Price Issue. 2.4 ISSUE PERIOD The Issue may be kept open for a minimum of three Working Days (for all category of Applicants) and not more than ten Working Days. Applicants are advised to refer to the Application Form and Abridged Prospectus or Prospectus for details of the Issue Period. Details of Issue Period are also available on the website of Stock Exchange(s). 2.5 MIGRATION TO MAIN BOARD SME Issuer may migrate to the Main Board of SE from the SME Exchange at a later date subject to the following: (a) If the Paid up Capital of the Company is likely to increase above Rs. 25 crores by virtue of any further issue of capital by way of rights, preferential issue, bonus issue etc. (which has been approved by a special resolution through postal ballot wherein the votes cast by the shareholders other than the Promoter in favour of the proposal amount to at least two times the number of votes cast by shareholders other than promoter shareholders against the Page 287 of 370

289 proposal and for which the company has obtained in-principal approval from the main board), the Company shall apply to SE for listing of its shares on its Main Board subject to the fulfilment of the eligibility criteria for listing of specified securities laid down by the Main Board. OR (b) If the Paid up Capital of the company is more than 10 crores but below Rs. 25 crores, the Company may still apply for migration to the main board if the same has been approved by a special resolution through postal ballot wherein the votes cast by the shareholders other than the Promoter in favour of the proposal amount to at least two times the number of votes cast by shareholders other than promoter shareholders against the proposal. 2.6 FLOWCHART OF TIMELINES A flow chart of process flow in Fixed Price Issues is as follows Page 288 of 370

290 Issuer Appoints SEBI Registered Intermediary Issue Period Closes (T-DAY) Extra Day for modification of details for applications already uploaded Registrar to issue bankwise data of allottees, allotted amount and refund amount to collecting banks Refund /Unblocking of funds is made for unsuccessful bids Due Diligence carried out by LM SCSB uploads ASBA Application details on SE platform RTA receive electronic application file from SEs and commences validation of uploaded details Credit of shares in client account with DPs and transfer of funds to Issue Account Listing and Trading approval given by Stock Exchange (s) LM files Draft Prospectus with Stock Exchange (SE) Applicant submits ASBA application form to SCSBs and Non-ASBA forms to Collection Banks Collecting banks commence clearing of payment instruments Instructions sent to SCSBs/ Collecting bank for successful allotment and movement of funds Trading Starts (T + 12) SE issues in principal approval Issue Opens Final Certificate from Collecting Banks / SCSBs to RTAs Basis of allotment approved by SE Determination of Issue dates and price Anchor Book opens allocation to Anchor investors (optional) RTA validates electronic application file with DPs for verification of DP ID / CI ID & PAN RTA completes reconciliation and submits the final basis of allotment with SE Page 289 of 370

291 SECTION 3: CATEGORY OF INVESTORS ELIGIBLE TO PARTICIPATE IN AN ISSUE Each Applicant should check whether it is eligible to apply under applicable law. Furthermore, certain categories of Applicants, such as NRIs, FPIs and FVCIs may not be allowed to apply in the Issue or to hold Equity Shares, in excess of certain limits specified under applicable law. Applicants are requested to refer to the Prospectus for more details. Subject to the above, an illustrative list of Applicants is as follows: Indian nationals resident in India who are not incompetent to contract in single or joint names (not more than three) or in the names of minors as natural/legal guardian; Hindu Undivided Families or HUFs, in the individual name of the Karta. The Applicant should specify that the application is being made in the name of the HUF in the Application Form as follows: Name of Sole or First applicant: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta. Applications by HUFs would be considered at par with those from individuals; Companies, Corporate Bodies and Societies registered under the applicable laws in India and authorized to invest in the Equity Shares under their respective constitutional and charter documents; Mutual Funds registered with SEBI; Eligible NRIs on a repatriation basis or on a non-repatriation basis, subject to applicable laws. NRIs other than Eligible NRIs are not eligible to participate in this Issue; Indian Financial Institutions, scheduled commercial banks, regional rural banks, co-operative banks (subject to RBI permission, and the SEBI Regulations and other laws, as applicable); FPIs other than Category III FPI; VCFs and FVCIs registered with SEBI Limited Liability Partnerships (LLPs) registered in India and authorized to invest in equity shares; State Industrial Development Corporations; Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law relating to Trusts and who are authorized under their constitution to hold and invest in equity shares; Scientific and/or Industrial Research Organizations authorized to invest in equity shares; Insurance Companies registered with IRDA; Provident Funds and Pension Funds with minimum corpus of Rs. 2,500 Lakhs and who are authorized under their constitution to hold and invest in equity shares; Multilateral and Bilateral Development Financial Institutions; National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of Government of India published in the Gazette of India; Insurance funds set up and managed by army, navy or air force of the Union of India or by Department of Posts, India; Any other person eligible to apply in this Issue, under the laws, rules, regulations, guidelines and policies applicable to them and under Indian laws As per the existing regulations, OCBs cannot participate in this Issue. Page 290 of 370

292 SECTION 4: APPLYING IN THE ISSUE Fixed Price Issue: Applicants should only use the specified Application Form either bearing the stamp of Collection Bank(s) or SCSBs as available or downloaded from the websites of the Stock Exchanges. Application Forms are available with the Branches of Collection Banks or Designated Branches of the SCSBs, at the corporate office of the Issuer and at the office of LM. For further details regarding availability of Application Forms, Applicants may refer to the Prospectus. Applicants should ensure that they apply in the appropriate category. The prescribed colour of the Application Form for various categories of Applicants is as follows: Category Resident Indian, Eligible NRIs applying on a non repatriation basis NRIs, FVCIs, FPIs, their Sub-Accounts (other than Sub-Accounts which are foreign corporate(s) or foreign individuals applying under the QIB), on a repatriation basis Anchor Investors (where applicable) & Applicants applying in the reserved category Colour of the Application White Blue Not Applicable Securities Issued in an IPO can only be in dematerialized form in compliance with Section 29 of the Companies Act, Applicants will not have the option of getting the allotment of specified securities in physical form. However, they may get the specified securities rematerialized subsequent to allotment. 4.1 INSTRUCTIONS FOR FILING THE APPLICATION FORM (FIXED PRICE ISSUE) Applicants may note that forms not filled completely or correctly as per instructions provided in this GID, the Prospectus and the Application Form are liable to be rejected. Instructions to fill each field of the Application Form can be found on the reverse side of the Application Form. Specific instructions for filling various fields of the Resident Application Form and Non-Resident Application Form and samples are provided below. The samples of the Application Form for resident Applicants and the Application Form for nonresident Applicants are reproduced below: Page 291 of 370

293 R Application Form Page 292 of 370

294 NR Application Form Page 293 of 370

295 4.1.1 FIELD NUMBER 1: NAME AND CONTACT DETAILS OF THE SOLE/ FIRST APPLICANT Applicants should ensure that the name provided in this field is exactly the same as the name in which the Depository Account is held. (a) Mandatory Fields: Applicants should note that the name and address fields are compulsory and and/or telephone number/ mobile number fields are optional. Applicants should note that the contact details mentioned in the Application Form may be used to dispatch communications(including refund orders and letters notifying the unblocking of the bank accounts of ASBA Applicants) in case the communication sent to the address available with the Depositories are returned undelivered or are not available. The contact details provided in the Application Form may be used by the Issuer, the members of the Syndicate, the Registered Broker and the Registrar to the Issue only for correspondence(s) related to an Issue and for no other purposes. (b) Joint Applications: In the case of Joint Applications, the Applications should be made in the name of the Applicant whose name appears first in the Depository account. The name so entered should be the same as it appears in the Depository records. The signature of only such first Applicant would be required in the Application Form and such first Applicant would be deemed to have signed on behalf of the joint holders. All payments may be made out in favour of the Applicant whose name appears in the Application Form or the Revision Form and all communications may be addressed to such Applicant and may be dispatched to his or her address as per the Demographic Details received from the Depositories. (c) Impersonation: Attention of the Applicants is specifically drawn to the provisions of sub section (1) of Section 38 of the Companies Act, 2013 which is reproduced below: Any person who: makes or abets making of an application in a fictitious name to a Company for acquiring, or subscribing for, its securities; or makes or abets making of multiple applications to a Company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or otherwise induces directly or indirectly a Company to allot, or register any transfer of securities to him, or to any other person in a fictitious name, Shall be liable for action under section 447 of the said Act. (d) Nomination Facility to Applicant: Nomination facility is available in accordance with the provisions of Section 109A of the Companies Act. In case of allotment of the Equity Shares in dematerialized form, there is no need to make a separate nomination as the nomination registered with the Depository may prevail. For changing nominations, the Applicants should inform their respective DP FIELD NUMBER 2: PAN NUMBER OF SOLE /FIRST APPLICANT (a) PAN (of the sole/ first Applicant) provided in the Application Form should be exactly the same as the PAN of the person(s) in whose name the relevant beneficiary account is held as per the Depositories records. (b) PAN is the sole identification number for participants transacting in the securities market irrespective of the amount of transaction except for Applications on behalf of the Central or State Government, Applications by officials appointed by the courts and Applications by Applicants residing in Sikkim ( PAN Exempted Applicants ). Consequently, all Applicants, other than the PAN Exempted Applicants, are required to disclose their PAN in the Application Form, irrespective of the Application Amount. An Application Form without PAN, except in case of Exempted Applicants, is liable to be rejected. Applications Page 294 of 370

296 by the Applicants whose PAN is not available as per the Demographic Details available in their Depository records, are liable to be rejected. (c) The exemption for the PAN Exempted Applicants is subject to (a) the Demographic Details received from the respective Depositories confirming the exemption granted to the beneficiary owner by a suitable description in the PAN field and the beneficiary account remaining in active status ; and (b) in the case of residents of Sikkim, the address as per the Demographic Details evidencing the same. (d) Application Forms which provide the General Index Register Number instead of PAN may be rejected. (e) Applications by Applicants whose demat accounts have been suspended for credit are liable to be rejected pursuant to the circular issued by SEBI on July 29, 2010, bearing number CIR/MRD/ DP/22/2010. Such accounts are classified as Inactive demat accounts and demographic details are not provided by depositories FIELD NUMBER 3: APPLICANTS DEPOSITORY ACCOUNT DETAILS (a) Applicants should ensure that DP ID and the Client ID are correctly filled in the Application Form. The DP ID and Client ID provided in the Application Form should match with the DP ID and Client ID available in the Depository database, otherwise, the Application Form is liable to be rejected. (b) Applicants should ensure that the beneficiary account provided in the Application Form is active. (c) Applicants should note that on the basis of DP ID and Client ID as provided in the Application Form, the Applicant may be deemed to have authorized the Depositories to provide to the Registrar to the Issue, any requested Demographic Details of the Applicant as available on the records of the depositories. These Demographic Details may be used, among other things, for giving refunds and allocation advice (including through physical refund warrants, direct credit, NECS, NEFT and RTGS), or unblocking of ASBA Account or for other correspondence(s) related to an Issue. (d) Applicants are, advised to update any changes to their Demographic Details as available in the records of the Depository Participant to ensure accuracy of records. Any delay resulting from failure to update the Demographic Details would be at the Applicants sole risk FIELD NUMBER 4: APPLICATION DETAILS (a) The Issuer may mention Price in the Draft Prospectus. However a prospectus registered with RoC contains one price. (b) Minimum And Maximum Application Size i. For Retail Individual Applicants ii. The Application must be for a minimum of 1,000 Equity Shares. As the Application Price payable by the Retail Individual Applicants cannot exceed Rs. 2, 00,000, they can make Application for only minimum Application size i.e. for 1,000 Equity Shares. For Other Applicants (Non Institutional Applicants and QIBs): The Application must be for a minimum of such number of Equity Shares such that the Application Amount exceeds Rs. 200,000 and in multiples of 1,000 Equity Shares thereafter. An Application cannot be submitted for more than the Issue Size. However, the maximum Application by a QIB investor should not exceed the investment limits prescribed for them by applicable laws. Under existing SEBI Regulations, a QIB Applicant cannot withdraw its Application after the Issue Closing Date and is required to pay 100% QIB Margin upon submission of Application. In Page 295 of 370

297 case of revision in Applications, the Non Institutional Applicants, who are individuals, have to ensure that the Application Amount is greater than Rs. 2,00,000 for being considered for allocation in the Non Institutional Portion. Applicants are advised to ensure that any single Application from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in this Prospectus. (c) Multiple Applications: An Applicant should submit only one Application Form. Submission of a second Application Form to either the same or to Collection Bank(s) or SCSB and duplicate copies of Application Forms bearing the same application number shall be treated as multiple applications and are liable to be rejected. (d) Applicants are requested to note the following procedures may be followed by the Registrar to the Issue to detect multiple applications: i. All applications may be checked for common PAN as per the records of the Depository. For Applicants other than Mutual Funds and FPI sub-accounts, Applications bearing the same PAN may be treated as multiple applications by an Applicant and may be rejected. ii. For applications from Mutual Funds and FPI sub-accounts, submitted under the same PAN, as well as Applications on behalf of the PAN Exempted Applicants, the Application Forms may be checked for common DP ID and Client ID. In any such applications which have the same DP ID and Client ID, these may be treated as multiple applications and may be rejected. (e) The following applications may not be treated as multiple Applications: i. Applications by Reserved Categories in their respective reservation portion as well as that made by them in the Net Issue portion in public category. ii. Separate applications by Mutual Funds in respect of more than one scheme of the Mutual Fund provided that the Applications clearly indicate the scheme for which the Application has been made. iii. Applications by Mutual Funds, and sub-accounts of FPIs (or FPIs and its subaccounts) submitted with the same PAN but with different beneficiary account numbers, Client IDs and DP IDs FIELD NUMBER 5: CATEGORY OF APPLICANTS i. The categories of applicants identified as per the SEBI ICDR Regulations, 2009 for the purpose of Application, allocation and allotment in the Issue are RIIs, individual applicants other than RII s and other investors (including corporate bodies or institutions, irrespective of the number of specified securities applied for). ii. An Issuer can make reservation for certain categories of Applicants permitted under the SEBI ICDR Regulations, For details of any reservations made in the Issue, applicants may refer to the Prospectus. iii. The SEBI ICDR Regulations, 2009 specify the allocation or allotment that may be made to various categories of applicants in an Issue depending upon compliance with the eligibility conditions. For details pertaining to allocation and Issue specific details in relation to allocation, applicant may refer to the Prospectus FIELD NUMBER 6: INVESTOR STATUS (a) Each Applicant should check whether it is eligible to apply under applicable law and ensure that any prospective allotment to it in the Issue is in compliance with the investment restrictions under applicable law. (b) Certain categories of Applicants, such as NRIs, FPIs and FVCIs may not be allowed to apply in the Issue or hold Equity Shares exceeding certain limits specified under Page 296 of 370

298 applicable law. Applicants are requested to refer to the Prospectus for more details. (c) Applicants should check whether they are eligible to apply on non-repatriation basis or repatriation basis and should accordingly provide the investor status. Details regarding investor status are different in the Resident Application Form and Non-Resident Application Form. (d) Applicants should ensure that their investor status is updated in the Depository records FIELD 7: PAYMENT DETAILS (a) All Applicants are required to make payment of the full Amount (net of any Discount, as applicable) along-with the Application Form. If the Discount is applicable in the Issue, the RIIs should indicate the full Amount in the Application Form and the payment shall be made for an Amount net of Discount. Only in cases where the Prospectus indicates that part payment may be made, such an option can be exercised by the Applicant. (b) RIIs and/or Reserved Categories applying in their respective reservation portion can apply, either through the ASBA mechanism or by paying the application amount through a cheque or a demand draft ( Non-ASBA Mechanism ). (c) Application Amount cannot be paid in cash, through money order or through postal order or through stock invest. (d) Please note that, providing bank account details in the space provided in the Application Form is mandatory and Applications that do not contain such details are liable to be rejected Instructions for non-asba Applicants: (a) Non-ASBA Applicants may submit their Application Form with the Collection Bank(s). (b) For Applications made through a Collection Bank(s): The Applicant may, with the submission of the Application Form, draw a cheque or demand draft for the application amount in favour of the Escrow Account as specified under the Prospectus and the Application Form and submit the same to the escrow Collection Bank(s). (c) If the cheque or demand draft accompanying the Application Form is not made favouring the Escrow Account, the form is liable to be rejected. (d) Payments should be made by CTS 2010 compliant cheque, or demand draft drawn on any bank (including a co-operative bank), which is situated at, and is a member of or submember of the bankers clearing house located at the centre where the Application Form is submitted. Non CTS 2010 cheques/bank drafts drawn on banks not participating in the clearing process may not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. (e) The Escrow Collection Banks shall maintain the monies in the Escrow Account for and on behalf of the Applicants until the Designated Date. (f) Applicants are advised to provide the number of the Application Form and PAN on the reverse of the cheque or bank draft to avoid any possible misuse of instruments submitted Payment instructions for ASBA Applicants (a) ASBA Applicants may submit the Application Form in physical mode to the Designated Branch of an SCSB where the Applicants have ASBA Account. (b) ASBA Applicants should specify the Bank Account number in the Application Form. The Application Form submitted by an ASBA Applicant and which is accompanied by cash, demand draft, money order, postal order or any mode of payment other than blocked amounts in the ASBA Account maintained with an SCSB, may not be accepted. Page 297 of 370

299 (c) Applicants should ensure that the Application Form is also signed by the ASBA Account holder(s) if the Applicant is not the ASBA Account holder; (d) Applicants shall note that that for the purpose of blocking funds under ASBA facility clearly demarcated funds shall be available in the account. (e) From one ASBA Account, a maximum of five Application Forms can be submitted. (f) ASBA Applicants applying directly through the SCSBs should ensure that the Application Form is submitted to a Designated Branch of a SCSB where the ASBA Account is maintained. (g) Upon receipt of the Application Form, the Designated Branch of the SCSB may verify if sufficient funds equal to the Application Amount are available in the ASBA Account, as mentioned in the Application Form. (h) If sufficient funds are available in the ASBA Account, the SCSB may block an amount equivalent to the Application Amount mentioned in the Application Form and may upload the details on the Stock Exchange Platform. (i) If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB may not upload such Applications on the Stock Exchange platform and such Applications are liable to be rejected. (j) Upon submission of a completed Application Form each ASBA Applicant may be deemed to have agreed to block the entire Application Amount and authorized the Designated Branch of the SCSB to block the Application Amount specified in the Application Form in the ASBA Account maintained with the SCSBs. (k) The Application Amount may remain blocked in the aforesaid ASBA Account until finalisation of the Basis of allotment and consequent transfer of the Application Amount against the Allotted Equity Shares to the Public Issue Account, or until withdrawal or failure of the Issue, or until withdrawal or rejection of the Application, as the case may be. (l) SCSBs applying in the Issue must apply through an ASBA Account maintained with any other SCSB; else their Applications are liable to be rejected Unblocking of ASBA Account (a) Once the Basis of Allotment is approved by the Designated Stock Exchange, the Registrar to the Issue may provide the following details to the controlling branches of each SCSB, along with instructions to unblock the relevant bank accounts and for successful applications transfer the requisite money to the Public Issue Account designated for this purpose, within the specified timelines: (i) the number of Equity Shares to be Allotted against each Application, (ii) the amount to be transferred from the relevant bank account to the Public Issue Account, for each Application, (iii) the date by which funds referred to in (ii) above may be transferred to the Public Issue Account, and (iv) details of rejected ASBA Applications, if any, along with reasons for rejection and details of withdrawn or unsuccessful Applications, if any, to enable the SCSBs to unblock the respective bank accounts. (b) On the basis of instructions from the Registrar to the Issue, the SCSBs may transfer the requisite amount against each successful ASBA Application to the Public Issue Account and may unblock the excess amount, if any, in the ASBA Account. (c) In the event of withdrawal or rejection of the Application Form and for unsuccessful Applications, the Registrar to the Issue may give instructions to the SCSB to unblock the Application Amount in the relevant ASBA Account within 12 Working Days of the Issue Closing Date. Page 298 of 370

300 Discount (if applicable) (a) The Discount is stated in absolute rupee terms. (b) RIIs, Employees and Retail Individual Shareholders are only eligible for discount. For Discounts offered in the Issue, applicants may refer to the Prospectus. (c) The Applicants entitled to the applicable Discount in the Issue may make payment for an amount i.e. the Application Amount less Discount (if applicable) Additional Payment Instructions for NRIs The Non-Resident Indians who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians (non-repatriation basis). In the case of applications by NRIs applying on a repatriation basis, payment shall not be accepted out of NRO Account FIELD NUMBER 8: SIGNATURES AND OTHER AUTHORISATIONS (a) Only the First Applicant is required to sign the Application Form. Applicants should ensure that signatures are in one of the languages specified in the Eighth Schedule to the Constitution of India. (b) If the ASBA Account is held by a person or persons other than the ASBA Applicant., then the Signature of the ASBA Account holder(s) is also required. (c) In relation to the ASBA Applications, signature has to be correctly affixed in the authorization/undertaking box in the Application Form, or an authorisation has to be provided to the SCSB via the electronic mode, for blocking funds in the ASBA Account equivalent to the application amount mentioned in the Application Form. (d) Applicants must note that Application Form without signature of Applicant and /or ASBA Account holder is liable to be rejected ACKNOWLEDGEMENT AND FUTURE COMMUNICATION Applicants should ensure that they receive the acknowledgment duly signed and stamped by an Escrow Collection Bank or SCSB, as applicable, for submission of the Application Form. (a) All communications in connection with Applications made in the Issue should be addressed as under: i. In case of queries related to Allotment, non-receipt of Allotment Advice, credit of allotted equity shares, refund orders, the Applicants should contact the Registrar to the Issue. ii. In case of ASBA applications submitted to the Designated Branches of the SCSBs, the Applicants should contact the relevant Designated Branch of the SCSB. iii. Applicant may contact the Company Secretary and Compliance Officer or LM(s) in case of any other complaints in relation to the Issue. (b) The following details (as applicable) should be quoted while making any queries - i. full name of the sole or First Applicant, Application Form number, Applicants DP ID, Client ID, PAN, number of Equity Shares applied for, amount paid on application. ii. In case of Non-ASBA applications cheque or draft number and the name of the issuing bank thereof iii. In case of ASBA applications, ASBA Account number in which the amount equivalent to the application amount was blocked. For further details, Applicant may refer to the Prospectus and the Application Form. Page 299 of 370

301 4.2 INSTRUCTIONS FOR FILING THE REVISION FORM (a) During the Issue Period, any Applicant (other than QIBs and NIIs, who can only revise their application amount upwards) who has registered his or her interest in the Equity Shares for a particular number of shares is free to revise number of shares applied using revision forms available separately. (b) RII may revise their applications till closure of the Issue period or withdraw their applications until finalization of allotment. (c) Revisions can be made only in the desired number of Equity Shares by using the Revision Form. (d) The Applicant can make this revision any number of times during the Issue Period. However, for any revision(s) in the Application, the Applicants will have to use the services of the SCSB through which such Applicant had placed the original Application. A sample Revision form is reproduced below: Other than instructions already highlighted at paragraph 4.1 above, point wise instructions regarding filling up various fields of the Revision Form are provided below: Page 300 of 370

302 Revision Form R Page 301 of 370

303 Revision Form - NR Page 302 of 370